The Link between Economic Complexity and Carbon Emissions in the European Union Countries: A Model Based on the Environmental Kuznets Curve (EKC) Approach

The aim of the paper is to apply the Environmental Kuznets Curve (EKC) model in order to explore the link between economic complexity index (ECI) and carbon emissions, in 25 selected European Union (EU) countries from 1995–2017. The study examines a cointegrating polynomial regression (CPR) for a panel data framework as well as for simple time series of individual countries. In the model is also included the variable ‘energy intensity’ as main determinant of carbon emissions. Depending on economic complexity, the CO2 emissions pattern was found to exhibit an inverted U-shaped curve: in the initial phase, pollution increases when countries augment the complexity of the products they export using and after a turning point the rise of economic complexity suppress the pollutant emissions. The panel cointegration test indicates a long-run relationship between economic complexity, energy intensity and carbon emissions. It was also found that a rise of 10% of energy intensity would lead to a 3.9% increase in CO2 emissions. The quadratic model incorporating ECI is validated for the whole panel as well as for six countries (Belgium, France, Italy, Finland, Sweden and the United Kingdom). The graphical representation of the EKC in these countries is discussed. Policy implications are also included.

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Energy intensity, CO2 emissions and the environmental Kuznets curve. The Spanish case

Energy Policy ◽

10.1016/s0301-4215(00)00154-3 ◽

2001 ◽

Vol 29 (7) ◽

pp. 553-556 ◽

Cited By ~ 61

Author(s):

Jordi Roca ◽

Vicent Alcántara

Keyword(s):

Co2 Emissions ◽

Environmental Kuznets Curve ◽

Energy Intensity ◽

Kuznets Curve

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Testing the Environmental Kuznets Curve Hypothesis in North America’s Free Trade Agreement (NAFTA) Countries

Energies ◽

10.3390/en13123104 ◽

2020 ◽

Vol 13 (12) ◽

pp. 3104 ◽

Cited By ~ 1

Author(s):

Raul Arango Miranda ◽

Robert Hausler ◽

Rabindranarth Romero Lopez ◽

Mathias Glaus ◽

Jose Ramon Pasillas-Diaz

Keyword(s):

Granger Causality ◽

Co2 Emissions ◽

Free Trade ◽

Environmental Kuznets Curve ◽

Free Trade Agreement ◽

Trade Agreement ◽

Ordinary Least Squares ◽

Policy Implications ◽

Kuznets Curve ◽

Ekc Hypothesis

In force since 1994, the North American Free Trade Agreement (NAFTA) is still the most comprehensive agreement ever developed, conforming to the world’s largest trade market. However, the environmental impacts cannot be neglected, particularly greenhouse gas emissions. The environmental Kuznets curve (EKC) hypothesis is revisited, studying Canada, Mexico, and the U.S.A. in relation to carbon dioxide (CO2) emissions, gross domestic product (GDP), energy, and exergy consumption. Ordinary least squares, vector autoregression, and Granger causality tests are conducted. Additionally, exergy indicators and the human development index (HDI) are proposed. Results for Mexico and the U.S.A. describe similar and interesting outcomes. In the search of the environmental Kuznets curve (EKC), the EKC hypothesis is confirmed for Mexico and the U.S.A. However, for Canada, the EKC hypothesis does not stand. The Granger causality test displays the existence of a uni-directional causality running from CO2 emissions to economic growth; a similar behavior was observed while testing the for the exergetic control variables. The most intriguing Granger causal results are those from the U.S.A. A bidirectional relation was observed between exergy intensity and CO2 emissions. Moreover, the EKC curve was plotted by both variables. Furthermore, Mexico’s outcomes reveal that increasing renewable exergy share will decrease CO2 emissions. On the contrary, increasing HDI will grow CO2 emissions. Policy implications arise for NAFTA countries to minimize CO2 emissions by means of the growing renewable energy share. Exergy tools offer an appealing insight into energetic and environmental strategies.

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Dynamic Effect of Oil Resources on Environmental Quality: Testing the Environmental Kuznets Curve Hypothesis for Selected African Countries

Sustainability ◽

10.3390/su13073649 ◽

2021 ◽

Vol 13 (7) ◽

pp. 3649

Author(s):

Mohamed Ouédraogo ◽

Daiyan Peng ◽

Xi Chen ◽

Shujahat Haider Hashmi ◽

Mamoudou Ibrahima Sall

Keyword(s):

Energy Consumption ◽

Co2 Emissions ◽

Environmental Quality ◽

Environmental Kuznets Curve ◽

Renewable Energy Sources ◽

Policy Implications ◽

Kuznets Curve ◽

Annual Data ◽

Causality Analysis ◽

Oil Resources

This paper examines the environmental Kuznets curve (EKC) theory, augmenting the role of oil resources and energy consumption in carbon dioxide (CO2) emissions using the annual data of 11 African oil-producing countries from 1980 to 2014. We apply advanced panel cointegration and panel autoregressive distributive lag (ARDL) techniques coupled with Granger non-causality analysis to account for cross-sectional dependence and heterogeneity. The results of the augmented mean group (AMG) reveal that oil resources abundance degrades the environmental quality in Angola while abating CO2 emissions in Algeria, Gabon, Morocco, and Nigeria. Contrarily, energy consumption escalates pollution in the Congo Democratic Republic (COD), Côte d’Ivoire (CIV), Gabon, Morocco, and Tunisia. Our findings support the EKC hypothesis only in Cameroon, CIV, and Nigeria while exhibiting a U-shaped curve in Algeria and Morocco. Causality analysis unveils that oil resources Granger cause energy consumption, suggesting the balance between renewable and non-renewable energy sources. The current study has important policy implications for promoting green technology, economic diversification, service sector, and green investments.

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Economic Growth and Environmental Quality in the European Union Countries – Is there Evidence for the Environmental Kuznets Curve?

International Journal of Management and Economics ◽

10.1515/ijme-2015-0018 ◽

2015 ◽

Vol 45 (1) ◽

pp. 108-126 ◽

Cited By ~ 17

Author(s):

Anna Mazur ◽

Zaur Phutkaradze ◽

Jaba Phutkaradze

Keyword(s):

Economic Growth ◽

European Union ◽

Co2 Emissions ◽

Environmental Kuznets Curve ◽

Carbon Dioxide Emission ◽

Gdp Per Capita ◽

Kuznets Curve ◽

The European Union ◽

European Union Countries ◽

Per Capita

Abstract This research empirically explores the relation between carbon dioxide emission and economic growth during the period 1992-2010, using panel data on the European Union countries. Both fixed and random effect models are employed to test the Environmental Kuznets Curve (EKC) relationship between CO2 emissions and GDP per capita. While no U-shaped EKC was confirmed empirically for all 28 current EU member states, the graphical analysis demonstrates a justified turning point for CO2 emissions as GDP per capita reaches the level of 23,000 USD. Furthermore, there is a firm empirical ground for the EKC hypothesis based on data from 16 older, relatively high-income EU states. Thus, though not empirically confirmed, there is ample data verifying the existence of the EKC in EU economies.

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Revisiting the Environmental Kuznets Curve Hypothesis: A Case of Central Europe

Energies ◽

10.3390/en14123415 ◽

2021 ◽

Vol 14 (12) ◽

pp. 3415

Author(s):

Bartosz Jóźwik ◽

Antonina-Victoria Gavryshkiv ◽

Phouphet Kyophilavong ◽

Lech Euzebiusz Gruszecki

Keyword(s):

Economic Growth ◽

Co2 Emissions ◽

Central Europe ◽

Environmental Kuznets Curve ◽

European Countries ◽

Kuznets Curve ◽

The European Union ◽

Ekc Hypothesis ◽

Central European ◽

Long Run

The rapid economic growth observed in Central European countries in the last thirty years has been the result of profound political changes and economic liberalization. This growth is partly connected with reducing carbon dioxide (CO2) emissions. However, the problem of CO2 emissions seems to remain unresolved. The aim of this paper is to test whether the Environmental Kuznets Curve (EKC) hypothesis holds true for Central European countries in an annual sample data that covers 1995–2016 in most countries. We examine cointegration by applying the Autoregressive Distributed Lag bound testing. This is the first study examining the relationship between CO2 emissions and economic growth in individual Central European countries from a long-run perspective, which allows the results to be compared. We confirmed the cointegration, but our estimates confirmed the EKC hypothesis only in Poland. It should also be noted that in all nine countries, energy consumption leads to increased CO2 emissions. The long-run elasticity ranges between 1.5 in Bulgaria and 2.0 in Croatia. We observed exceptionally low long-run elasticity in Estonia (0.49). Our findings suggest that to solve the environmental degradation problem in Central Europe, it is necessary to individualize the policies implemented in the European Union.

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Export Diversification and Ecological Footprint: A Comparative Study on EKC Theory among Korea, Japan, and China

Sustainability ◽

10.3390/su10103657 ◽

2018 ◽

Vol 10 (10) ◽

pp. 3657 ◽

Cited By ~ 18

Author(s):

Hongbo Liu ◽

Hanho Kim ◽

Shuanglu Liang ◽

Oh-Sang Kwon

Keyword(s):

Economic Development ◽

Environmental Kuznets Curve ◽

Ecological Footprint ◽

Developed Countries ◽

Product Diversification ◽

Policy Implications ◽

Export Market ◽

Kuznets Curve ◽

Export Product ◽

Export Product Diversification

This study examines the Environmental Kuznets Curve (EKC) hypothesis by adopting a country’s ecological footprint as an indicator of environmental degradation in three East Asian countries: Japan, Korea, and China. During the development process, countries intend to balance between stabilizing export demand and maintaining sustainable economic improvement in the context of deteriorating global warming and climate change. The Environmental Kuznets Curve (henceforth, EKC) was originally developed to estimate the correlation between environment condition and economic development. In this paper, we started from the EKC model and adopted an Error Correction Methodology (henceforth, ECM) to estimate the EKC relationships in Japan, Korea (two developed countries), and China (a developing country) over the period of 1990 to 2013. Besides this, instead of only using Gross Domestic Product (henceforth, GDP), two subdivisions of trade diversification—export product diversification and export market diversification—are introduced as proxy variables for economic development in rectification of the EKC. The results demonstrate that both Korea and Japan satisfy the EKC theory by demonstrating an inverted U-shaped relationship between economic development and ecological footprint, while analysis based on data from China does not display the same tendency. For both export product diversification and market diversification, the more diversified the country’s export is, the bigger its ecological footprint. The policy implications of this econometric outcome are also discussed.

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Are CO2 emissions converging in the European Union? Policy implications

Notas Económicas ◽

10.14195/2183-203x_49_5 ◽

2019 ◽

pp. 63-82

Author(s):

Rafael Morales-Lage ◽

Aurelia Bengochea-Morancho ◽

Immaculada Martínez-Zarzoso

Keyword(s):

European Union ◽

Co2 Emissions ◽

Agricultural Sector ◽

Industrial Sector ◽

Policy Implications ◽

Transport Sector ◽

The European Union ◽

Conditional Convergence ◽

European Union Policy ◽

Cross Sectional

This paper focuses on the process of convergence in per capita CO2 emissions that would occur if the measures taken by the European Union to meet the Kyoto Protocol commitments had been effective. We apply a time series and cross-sectional analysis to test for the existence of convergence among countries and for different economic sectors. The sample covers data for the 28 member countries from 1960 to 2012. The results show weak absolute convergence across countries but clear evidence of conditional convergence, with GDP, the weight of industrial sector and the use of renewable energies being the main drivers of divergence. Concerning sectors, there is an increase of emissions in the agricultural sector, but a reduction in the industrial and energy sectors. Different patterns arise in the energy subsectors where manufacturing and electricity notably reduced their emissions while the transport sector increased them in all countries.

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