Environmental Kuznets Curve Framework Research Articles

Environmental sustainability and economic development in sub-Saharan Africa: A modified EKC hypothesis

Despite numerous studies of the Environmental Kuznets Curve (EKC), the evidence is still inconclusive and little has been done to capture the issue of environmental sustainability and welfare aspects of growth in the EKC relationship. Accordingly, this paper aims to investigate the environment-development linkage under a sustainability-oriented EKC framework in 20 sub-Saharan African (SSA) countries for the period from 1990 to 2015. The Common Correlated Effects version of Pooled Mean Group Estimator (CCE-PMG) in the context of error-correction based panel Autoregressive Distributed Lag (ARDL) model augmented with cross-sectional averages was employed as a preferred estimation technique. The study also used an appropriate U test to check the presence of genuine inverted U-shaped EKC relationship. The results confirm the existence of a modified EKC hypothesis in SSA, but the linkage depends on the extent of endowment of natural resources. Among the growth-related factors, energy consumption and trade openness are found to have a long run detrimental effect on the environment. The study suggests that country's effort for economic development needs to be accompanied by appropriate policy options to ensure environmental sustainability.

Assessing the impacts of ageing and natural resource extraction on carbon emissions: A proposed policy framework for European economies

Given the rise in ageing population and rising globalization, the European nations are facing difficulties in encountering the climate action and ascertaining energy security. For diffusing the energy innovations and curtailing natural resource extraction, with an objective of reducing carbon emissions, the existing policy framework in these nations might need a reorientation, and there comes the role of the study. This study recommends a policy framework for exploring the effect of natural resource extraction and age dependence on carbon emissions in top-5 European countries (EU-5) for the period of 1990–2017. By applying the Second Generation Panel Modeling approach, the empirical results indicate that the associations of carbon emissions with natural resource extraction, globalization index, and economic growth and ageing population follow an inverted U-shaped relationship, in keeping with the framework of Environmental Kuznets Curve (EKC) hypothesis. Based on the findings of the study, a multipronged Sustainable Development Goal (SDG) framework has been designed, and through this framework, SDG 7, SDG 13, and thereafter SDG 8 have been evaluated. While these three SDGs are the central focus of the study, the SDG framework has also suggested a way to evaluate several tangential SDGs.

Applying environmental Kuznets curve framework to assess the nexus of industry, globalization, and CO2 emission

Malaysia has continued to increase the explosive growth rate of its industries in recent years. The rise of globalization has driven Malaysia’s economic development at the ecosystem level of pollution. This research study explores the relationship of CO 2 emissions, gross domestic product, globalization, industrialization, and trade openness for Malaysia by using annual data for 1971–2016. By applying the ARDL bound testing approach, the estimates infer that CO 2 emissions have steadily risen with high economic growth and affirm the U-shaped environmental Kuznets curve (EKC). Globalization’ index and trade openness surge Malaysian CO 2 emissions. While industrialization has a statistically significant negative impact on CO 2 emissions. The VECM Granger causality infers the unidirectional causality running from economic growth, globalization, industrialization, and trade openness to CO 2 emission in the short-run Finally, this study provides some suggestions to Malaysian policymakers for devising carbon emission reduction strategies. • Relationship of CO 2 emissions, gross domestic product, globalization, industrialization, and trade openness for Malaysia. • ARDL bounds testing approach and VECM. • Suggestions to Malaysian policymakers for devising carbon emission reduction strategies.

The effects of renewable energy, spatial spillover of CO2 emissions and economic freedom on CO2 emissions in the EU

Renewable energy is a variable influencing CO2 emission. Previous studies investigated its effects on CO2 emission in the European Union (EU) countries using classical econometrics method. However, if there was a spatial dependence between CO2 emissions of the EU countries, the results of previous studies may have been biased. Another gap in the literature is nonlinear effects of economic freedom on CO2 emissions. To fill these gaps, the present study explored the aforementioned issues in the framework of environmental Kuznets curve in the EU countries for period 2000 to 2017 using a spatial dynamic panel data model. The results showed that the renewable energy consumption had a negative effect on CO2 emissions, and the relationship between economic freedom and CO2 emissions was U-shaped. Finally, a significant positive spatial lag coefficient was found for CO2 emissions, indicating that the CO2 emissions of a country were positively correlated with those of its neighbors.

The Moderating Role of Employment in an Environmental Kuznets Curve Framework Revisited in G7 Countries

Anthropogenic activities have resulted in environmental concerns due to the global consciousness for mitigating climate change issues. This awareness is emphasized in the sustainable development goals contained in the seventh and 13th targets. The study investigates the nexus between energy and growth while considering the moderating role of employment and its interaction with energy consumption in G7 countries for the period of 1980–2018. To achieve this objective, a carbon-income function is fitted to ameliorate the problems related to omitted variable bias. Empirical results indicate that all outlined variables are cointegrated over the investigated period, as reported by the Kao cointegration test. The study further validates the environmental Kuznets curve (EKC) hypothesis in the short-run. With emphasis on economic growth relative to environmental quality while in the long run, there is no statistical evidence in support of the EKC phenomenon. Furthermore, a 1% increase in energy consumption increases pollutant emission in the long run by 3.80%. Similarly, a positive elastic relationship is observed between trade and environmental degradation. This outcome is demonstrated in the causality results, which reveal a one-way causality running from trade to pollutant emission. These findings provide insights that can help policy formulations, including decoupling economic growth from pollutant emission and the need to adopt cleaner and eco-friendly technologies.

The role of financial development, tourism, and energy utilization in environmental deficit: evidence from 20 highest emitting economies.

This study establishes a long-run relationship between ecological footprint, financial development, energy utilization, and tourism in 20 highest emitting economies under the environmental Kuznets curve (EKC) framework by utilizing the longitudinal data covering the period from 1995 to 2017. In the procedure of panel data estimation, conventional methodologies usually overlook the problem of cross-sectional dependence and heterogeneity across cross-sections. The other concern linked to the published literature is that only a small number of studies have estimated the effect of financial development and tourism on the environment in the presence of EKC framework simultaneously, even though these sectors have potentially substantial impact on environmental quality. To bridge these analyzed gaps, this study employs two different unit root tests: Cross-section Augmented Dickey Fuller (CADF) and Cross-section Augmented Im, Pesaran and Shin (CIPS) to confirm that the series are stationary at first difference after confirming the cross-sectional dependency. Westerlund cointegration test applied to confirm the long-run association among variables. Augmented mean group (AMG) results discovered that financial development and the energy utilization significantly enhance the pollution level, while tourism sector reduces the environmental deficit. Moreover, these findings do not validate the EKC hypothesis. Based on the empirical findings, multiple policy implications are suggested to control and reduce the environmental degradation without hindering economic growth and development for the underlying highest emitting countries.

Factors affecting methane emissions in OPEC member countries: does the agricultural production matter?

The aim of this study was to study the factors affecting methane emission in Organization of the Petroleum Exporting Countries (OPEC) member countries. Also, the effect of agricultural production including crop and livestock production on methane emissions is surveyed by employing the environmental Kuznets curve framework. To achieve these goals, a panel data of 11 OPEC member countries were examined over the period of 1995–2012. According to stationary properties of the variables, Hausman test, homogeneity test, cross-sectional dependence test, and co-integration tests, the panel dynamic ordinary least square and error correction model were investigated. The empirical results provided the evidence supporting N-shaped nexus between gross domestic production and methane emission in OPEC member countries. In addition, the results indicated that there is a significant positive relationship between energy consumption and methane emission. Also, results revealed that crop and livestock production have a significant positive effect on methane emission in OPEC member countries. According to the long-run estimated parameters, livestock activities were more likely to cause methane contamination than crop production in agricultural production. The results of this study showed that the OPEC member countries should focus on agricultural crop production instead of livestock production for diversify of their income. Also, a vegetarian diet can have a significant effect on the reduction of the methane emission in OPEC member countries, by decreasing the livestock production demand.

The impact of clean energy consumption on economic growth and CO2 emissions in BRICS countries: Does the environmental Kuznets curve exist?

This paper examines the impact of clean energy consumption (CEC) on economic growth (EG) and CO2 emissions (CO2) within a framework of environmental Kuznets curve (EKC) hypothesis in a panel of BRICS countries for the period 1992–2014. The results indicated that CEC and EG have a significant positive impact on EG, while CO2 has a negative impact on it. Our results also found that EC and EG increase CO2 while CEC significantly reduces it. Further, we found that the EKC hypothesis is valid in the BRICS countries. Finally, panel causality test indicated that unidirectional causality running from EC to EG. However, we did not find a causal relationship between CEC and EG. Based on these results, some of the policy implications have proposed for these emerging market economies.

The Role of Natural Gas in Indonesia CO2 Mitigation Action: The Environmental Kuznets Curve Framework

Indonesia is one of the developing countries in the world, which is predicted to become one of the strongest economies in the world. Many challenges facing Indonesia, along with its economic growth, include energy security and environmental problems. These problems can be overcome simultaneously with the selection and allocation of appropriate energy sources. With the constraints of dependence on fossil energy, natural gas can be a "clean fossil energy” choice that can reduce CO2 emissions amid Indonesia's economic growth. Under the Environmental Kuznets Curve (EKC) framework and the ARDL to cointegration approach, this study estimates the long-term and short-term relationship between CO2 emissions and per capita GDP in three different models. The estimation results show that EKC in Indonesia is generally formed in the long term, but not in the electricity sector. The existence of EKC in Indonesia indicates the effects of energy conservation. The estimation results also show that natural gas consumption has a negative correlation with CO2 emissions in general. In the electricity sector, electricity from natural gas contributes to the smallest CO2 emissions. Empirical evidence from this study can then be used as a reference in the formulation of policies related to the energy mix and efforts to encourage increased domestic natural gas consumption.

The role of bioenergy in greenhouse gas emission reduction in EU countries: An Environmental Kuznets Curve modelling

Bioeconomy is an important element of European Union (EU) political agenda. Promotion of bioenergy is one of the main aspects of bioeconomy strategy. The aim of this paper is to show how the development of bioenergy can contribute to climate change (and the associated policy). Specifically, we look into the possible reduction of GHG emissions within the framework of Environmental Kuznets Curve (EKC). The panel models are estimated for the EU countries by modifying the classical EKC by including in the EKC model biomass and other renewables. The results showed that the coefficient associated with GDP decreases when renewables are included in the model. More specifically, the more types of renewables are included, the lower values of the coefficient associated with the linear term are observed. Furthermore, the effect of biomass on the reduction of GHG emission is higher if opposed to that caused by the other renewable resources. If we hold other factors fixed, increase in biomass use of 1% would reduce GHG emission by 0.089%, whereas the effect of the other renewable energy sources is 0.025%. Therefore, the development of bioeconomy and the promotion of bioenergy are one of the main tools for climate change mitigation.

Income inequality and CO2 emissions: Empirical evidence from Turkey

The aim of the study is to investigate the impact of income inequality on environmental quality in Turkey within the Environmental Kuznets Curve framework. In order to observe the short-run and long-run effects of income inequality on environmental quality, an autoregressive distributed lag bounds test on CO2 emission has been employed for the period 1963–2011 of Turkey. The results of the analysis reveal that there is a negative association between CO2 emission level and income inequality, which implies that increasing income inequality reduces environmental degradation in Turkey. Hence, a greater inequality in the society leads to less aggregate consumption in the economy due to lower propensity to emit in the richer households resulting in better environmental quality. The findings confirm an argument in the existing literature, which suggests that for developing countries, until a certain level of development, environmental degradation increases as income inequality in the society decreases. The results also confirm the Environmental Kuznets Curve hypothesis.

The influence of coal and noncarbohydrate energy consumption on CO2 emissions: Revisiting the environmental Kuznets curve hypothesis for Turkey

The purpose of this paper is to investigate the dynamic long run relationship between CO2 emissions, economic growth, financial development, trade openness, industrialization, urbanization, coal and noncarbohydrate energy consumption within the framework of environmental Kuznets curve (EKC) for Turkey over the period 1971–2014. The two main contributions of this study are that the EKC hypothesis has been examined by separating trade openness and final energy consumption into import-export and coal-noncarbohydrate energy consumption respectively. The findings of the autoregressive disturbed lag bounds testing approach showed that economic growth, coal consumption, financial development, import, industrialization and urbanization had a positive impact on CO2 emissions, while export and noncarbohydrate energy consumption decreased CO2 emission in the long run. Moreover, the study supported the EKC hypothesis, which suggests an inverted U-shaped relationship between per capita income and CO2 emissions. The turning point obtained from long run regression was found to be approximately $14360 that outside of the sample period. Finally, these important findings indicate that noncarbohydrate energy consumption and export can be a solution to reduce environmental pollution, and Turkey's CO2 emissions will begin to decline when the country reaches the per capita income level at the turning point in the coming years.

The policy implications of the relationship between energy consumption, energy intensity and economic growth in Ghana

AbstractThe 19739/74 and 1979/1980 oil price shocks coupled with the unreliability of its supply as against the ever‐increasing demand for energy‐based inputs, further reinforced the stern implications that energy may have on economic development reducing energy intensity is often advocated as a way to ensure efficient utilisation of energy resources and minimising the adverse effects of its shortage on economic development. Using the annual time series data set spanning 1981–2014 this study examined, in Ghana where energy crises continue to immense adverse effects on the economy, the relationships between energy consumption and economic growth at the one hand, and that between energy intensity and economic growth on the other hand within the standard Environmental Kuznets Curve framework. In Autoregressive Distributed Lagged model estimation, there was strong evidence of the existence of a valid long‐run relationship between energy consumption and economic growth as well as energy intensity and economic growth.

The environmental Kuznets curve in Indonesia: Exploring the potential of renewable energy

There is an increasing interest in investigating the environmental Kuznets curve (EKC) hypothesis because it suggests the existence of a turning point in the economy that will lead to a sustainable development path. Although many studies have focused on the EKC, only a few empirical studies have focused on analyzing the EKC with specific reference to Indonesia, and none of them have examined the potential of renewable energy sources within the EKC framework. This study attempts to estimate the EKC in the case of Indonesia for the period of 1971–2010 by considering the role of renewable energy in electricity production, using the autoregressive distributed lag (ARDL) approach to cointegration as the estimation method. We found an inverted U-shaped EKC relationship between economic growth and CO2 emissions in the long run. The estimated turning point was found to be 7729 USD per capita, which lies outside of our sample period. The beneficial impacts of renewable energy on CO2 emission reduction are observable both in the short run and in the long run. Our work has important implications both for policymakers and for the future development of renewable energy in Indonesia.

Testing the environmental Kuznets curve hypothesis for water footprint indicator: a cross-sectional study

The water footprint analysis has become a rapidly growing field of research although little attention has been paid to its relationship with economic growth. Using the available cross-section data, this study examines how the per capita water footprint varies as a function of per capita income within the environmental Kuznets curve framework at both aggregated and disaggregated level of water footprint. In addition, the issue of omitted variables is investigated by incorporating a number of control variables. Estimation results show no evidence in favour of an inverted-U environmental Kuznets curve, but they yield, in most cases, an evolution into an N-shaped relationship. This means that water footprint rises in the beginning with incomes, then falls as nations grow wealthier to rise again at very high income levels. This calls into question the traditional economic view of income growth sustainability as it applies to water.

Population ageing, income growth and CO2emission

Purpose The purpose of this paper is to attempts to explore the relationship between population ageing, income growth and CO2 emission in 25 high-income Organization for Economic Cooperation and Development (OECD) countries in the framework of environmental Kuznets curve (EKC).

Functional Form of Water Pollutants‐Income Relationship under the Environmental Kuznets Curve Framework

Functional Form of Water Pollutants‐Income Relationship under the Environmental Kuznets Curve Framework

Growth and environmental pollution: empirical evidence from China

PurposeThe rapid economic growth of China has attracted the attention of economists, researchers and politicians. China is one of the largest economies in the world, with its gross domestic product (GDP) rising on an average above 9 percent. This economic growth is considered responsible for environmental degradation, which appears to be the most significant problem that economic growth causes. The purpose of this paper is to explore China's carbon emissions during 1960‐2006, focusing on the role of growth, trade and the value added by various sectors.Design/methodology/approachUsing time series data, this paper investigates China's carbon emissions during 1960‐2006, with particular focus on the direct role of growth and in connection to trade and the value added by various sectors such as agriculture, industry and services.FindingsThe authors' empirical results indicate the presence of an inverted U‐shaped curve between CO2 emissions and growth represented by the GDP per capita. Trade seems to be an important determinant in this relationship.Practical implicationsSuch empirical findings provide evidence for policy implications regarding the role of growth, trade and the value added by the various sectors of the economy on environmental degradation.Originality/valueThis study is the first effort to explore the associated implications of growth, trade and the effect of the various sectors' value added on environmental damage in an environmental Kuznets curve framework.

Are there increasing returns to pollution abatement? Empirical analytics of the Environmental Kuznets Curve in pesticides

According to the Environmental Kuznets Curve (EKC) hypothesis, economic growth and the reduction of environmental degradation are compatible goals. An inverted U-shaped relationship between economic performance and environmental pollution suggests that, empirically, an economy is associated with smaller levels of pollution after some threshold income point. One potential explanation for the empirical evidence of an EKC is increasing returns to pollution abatement, where the abatement efficiency rises with an increase in the scale of abatement. Doubling the clean-up efforts more than doubles the abatement of pollution. As this efficiency gain makes abatement less expensive, pollution might fall as more abatement is undertaken. This study tests the hypothesis that there are increasing returns to abating pollution. Empirical evidence on environmental risks in the US agricultural sector since 1970 support the existence of increasing returns. In addition, I estimate the productivity of pollution abatement using refined empirical productivity measurement methods and explicitly control the level of technology. The results show the importance of including an environmental productivity variable in the EKC framework.

A dynamic approach to the Environmental Kuznets Curve hypothesis

The Environmental Kuznets Curve (EKC) hypothesis states that pollution levels increase as a country develops, but begin to decrease as rising incomes pass beyond a turning point. In EKC analyses, the relationship between environmental degradation and income is usually expressed as a quadratic function with the turning point occurring at a maximum pollution level. Other explanatory variables have been included in these models, but income regularly has had the most significant effect on indicators of environmental quality. One variable consistently omitted in these relationships is the price of energy. This paper analyzes previous models to illustrate the importance of prices in these models and then includes prices in an econometric EKC framework testing energy/income and CO 2/income relationships. These long-run price/income models find that income is no longer the most relevant indicator of environmental quality or energy demand. Indeed, we find no significant evidence for the existence of an EKC within the range of current incomes for energy in the presence of price and trade variables.