Malaysia’s Energy-Growth Nexus and Environmental Kuznets Curve Hypothesis: Empirical Analysis Using the VECM and ARDL Cointegration Techniques

This paper investigated Malaysia’s energy-growth nexus and environmental Kuznets curve (EKC) hypothesis over the period 1971-2014 by taking the globalization variables of trade openness and foreign direct investment (FDI) and the structural break dummy of the Asian financial crisis of 1997 into estimation. To give interference, the Granger causality tests were implemented in the framework of two cointegration techniques: vector error correction model (VECM) and autoregressive distributed lag (ARDL). As per Malaysia’s energy-growth nexus, referring to different results of the two approaches, we concluded that the presence of the energy-growth nexus was statistically confirmed, but it has not been fully established yet in the country. On the other hand, both the VECM and ARDL results provided the same conclusion for Malaysia’s EKC hypothesis, that is, in the initial stage, as the higher economic growth, the less CO2 emissions, but after a threshold, the higher economic growth, the more CO2 emissions.

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Environmental Kuznets Curve Hypothesis on CO2 Emissions: Evidence for China

Journal of Risk and Financial Management ◽

10.3390/jrfm14030093 ◽

2021 ◽

Vol 14 (3) ◽

pp. 93

Author(s):

Jihuan Zhang

Keyword(s):

Energy Consumption ◽

Co2 Emissions ◽

Environmental Kuznets Curve ◽

Trade Openness ◽

Co2 Reduction ◽

Kuznets Curve ◽

Ekc Hypothesis ◽

Distributed Lag ◽

Long Run ◽

Negative Effect

China is the largest CO2 emitter in the world, and it shared 28% of the global CO2 emissions in 2017. According to the Paris Agreement, it is estimated that China’s CO2 emissions will reach its peak by 2030. However, whether or not the CO2 emissions in China will rise again from its peak is still unknown. If the emission level continues to increase, the Chinese policymakers might have to introduce a severe CO2 reduction policy. The aim of this paper is to conduct an empirical analysis on the long-standing relationship between CO2 emissions and income while controlling energy consumption, trade openness, and urbanization. The autoregressive distributed lag (ARDL) model and the bounds test were adopted in evaluating the validity of the Environmental Kuznets Curve (EKC) hypothesis. The quantile regression was also used as an inference approach. The study reveals two major findings: first, instead of the conventional U-shaped EKC hypothesis, there is the N-shaped relationship between CO2 emissions and real gross domestic product (GDP) per capita in the long run. Second, a positive effect of energy consumption and a negative effect of urbanization on CO2 emissions, in the long run, are also estimated. Quantitatively, if energy consumption rises by 1%, then CO2 emissions will increase by 0.9% in the long run. Therefore, the findings suggest that a breakthrough, in terms of policymaking and energy innovation under China’s specific socioeconomic and political circumstances, are required for future decades.

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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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Carbon Emissions and Income Trajectory in Eight Heterogeneous Countries: The Role of Trade Openness, Energy Consumption and Population Dynamics

Journal of Global Economy ◽

10.1956/jge.v9i2.306 ◽

2013 ◽

Vol 9 (2) ◽

Author(s):

OLUWOLE OWOYE ◽

OLUGBENGA A. ONAFOWORA

Keyword(s):

Economic Growth ◽

Energy Consumption ◽

Co2 Emissions ◽

Trade Openness ◽

Policy Decision ◽

Kuznets Curve ◽

Ekc Hypothesis ◽

Sample Mean ◽

Long Run ◽

Wide Range

This paper examines the long-run and dynamic temporal relationships between economic growth, energy consumption, population density, trade openness, and carbon dioxideÂ Â Â (CO2) emissions in Brazil, China, Egypt, Japan, Mexico, Nigeria, South Korea, and South Africa based on the environment Kuznets curve (EKC) hypothesis. We employ the ARDL Bounds test to cointegration and CUSUM and CUSUMSQ tests to ensure long-run cointegration and parameter stability.Â The estimated results show that the inverted U-shaped EKC hypothesis holds in Japan and South Korea.Â In the other six countries, the long-run relationship between economic growth and CO2 emissions follows an N-shaped trajectory and the estimated turning points are much higher than the sample mean. In addition, the results indicate that energy consumption Granger-causes both CO2 emissions and economic growth in all the countries.Â An important implication of our findings is that it would be ill-advised for the policy decision makers to adopt the EKC postulate as the conceptual basis for policies favoring economic growth unconditionally. A wide range of policy initiatives that would induce increased demand for better environment quality and its sustainability should be explored in tandem with measures to spur economic growth.

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Does the Environmental Kuznets Curve Exist? An International Study

Sustainability ◽

10.3390/su12219117 ◽

2020 ◽

Vol 12 (21) ◽

pp. 9117 ◽

Cited By ~ 1

Author(s):

Nutnaree Maneejuk ◽

Sutthipat Ratchakom ◽

Paravee Maneejuk ◽

Woraphon Yamaka

Keyword(s):

Economic Growth ◽

International Economic ◽

Co2 Emissions ◽

Environmental Degradation ◽

Environmental Kuznets Curve ◽

Environmental Damage ◽

Kuznets Curve ◽

Ekc Hypothesis ◽

The Impact ◽

The Relationship

This study aims to examine the relationship between economic development and environmental degradation based on the Environmental Kuznets Curve (EKC) hypothesis. The level of CO2 emissions is used as the indicator of environmental damage to determine whether or not greater economic growth can lower environmental degradation under the EKC hypothesis. The investigation was performed on eight major international economic communities covering 44 countries across the world. The relationship between economic growth and environmental condition was estimated using the kink regression model, which identifies the turning point of the change in the relationship. The findings indicate that the EKC hypothesis is valid in only three out of the eight international economic communities, namely the European Union (EU), Organization for Economic Co-operation and Development (OECD), and Group of Seven (G7). In addition, interesting results were obtained from the inclusion of four other control variables into the estimation model for groups of countries to explain the impact on environmental quality. Financial development (FIN), the industrial sector (IND), and urbanization (URB) were found to lead to increasing CO2 emissions, while renewable energies (RNE) appeared to reduce the environmental degradation. In addition, when we further investigated the existence of the EKC hypothesis in an individual country, the results showed that the EKC hypothesis is valid in only 9 out of the 44 individual countries.

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Economic Growth And Carbon Dioxide Emissions: The Environmental Kuznets Curve Hypothesis In Yemen

Iraqi Journal of Economic Sciences ◽

10.31272/ijes2021.68.3 ◽

2021 ◽

Vol 2021 (68) ◽

pp. 42-58

Author(s):

Essa Alhannom ◽

Ghaleb Mushabab

Keyword(s):

Economic Growth ◽

Carbon Dioxide ◽

Energy Consumption ◽

Co2 Emissions ◽

Carbon Dioxide Emissions ◽

Environmental Kuznets Curve ◽

Trade Openness ◽

Kuznets Curve ◽

Per Capita ◽

Environmental Kuznets Curve Hypothesis

Abstract This study investigates the validity of the Environmental Kuznets Curve hypothesis in Yemen and the causal relationships between Carbon dioxide emissions, per capita income, energy consumption, trade openness, and industrial share to GDP. ARDL bounds testing approach to cointegration, Error Correction Model, and Toda-Yamamoto procedure to Granger causality techniques were employed on annual data covering the period from 1990 to 2010. long run relationship between CO2 emissions and its determinants with significant effects for per capita GDP and trade openness, whereas, energy consumption and trade openness appear to be important determinants of CO2 emissions in the short run. Besides, based on Narayan and Narayan (2010) approach, it is found that the EKC hypothesis does not hold in Yemen and therefore the effect of per capita income on CO2 emissions is monotonically increasing. Toda-Yamamoto causality test proved the existence of bidirectional causal relationships between economic growth and CO2 emissions, between energy consumption and economic growth, and between trade openness and energy consumption

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Environmental Kuznets Curve for Carbon Dioxide Emissions and Economic Growth in Algeria

Margin The Journal of Applied Economic Research ◽

10.1177/09738010211036261 ◽

2021 ◽

Vol 15 (4) ◽

pp. 418-432

Author(s):

Mohammed Touitou ◽

Raquel Langarita

Keyword(s):

Economic Growth ◽

Carbon Dioxide ◽

Carbon Dioxide Emissions ◽

Environmental Kuznets Curve ◽

Kuznets Curve ◽

Distributed Lag ◽

Real Gdp ◽

Causality Tests ◽

Auto Regressive

This article examines how economic growth affects the environment through the lens of carbon dioxide (CO2) emissions, by testing the validity of the environmental Kuznets curve (EKC) for the case of Algeria during the period 1973–2016. For this, the auto regressive distributed lag (ARDL) method is used. The results of the econometric analysis confirm the existence of a positive long-term relationship between CO2 emissions and real GDP and show that the direction of this relationship goes from economic growth to CO2 emissions according to Granger causality tests. Specifically, for a developing country like Algeria, economic growth determines the level of emissions. This implies that an energy policy in favour of the environment can be put in place without risking negative repercussions on economic growth. In addition, the results of the ARDL regression validate EKC’s hypothesis: in the first phase, economic growth leads to a higher level of CO2 emissions, however, when a given threshold (inflection point) is reached, these emissions decrease. JEL Codes: O10, O47, Q50, Q53

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ECONOMIC GROWTH AND CO2 EMISSIONS IN INDONESIA : INVESTIGATING THE ENVIRONMENTAL KUZNETS CURVE HYPOTHESIS EXISTENCE

Jurnal BPPK : Badan Pendidikan dan Pelatihan Keuangan ◽

10.48108/jurnalbppk.v12i1.369 ◽

2019 ◽

Vol 12 (1) ◽

pp. 42-52

Author(s):

Azwar Iskandar

Keyword(s):

Economic Growth ◽

Economic Development ◽

World Bank ◽

Environmental Kuznets Curve ◽

Co2 Emission ◽

Kuznets Curve ◽

Ekc Hypothesis ◽

Development Indicators ◽

Distributed Lag ◽

Autoregressive Distributed Lag

Peningkatan ancaman polusi udara dan pemanasan global telah dibahas secara luas dalam berbagai event internasional. Environmental Kuznets Curve (EKC) menjadi sebuah isu riset yang memotivasi banyak studi dalam mengklaim adanya hubungan antara pendapatan ekonomi dan emisi CO2 melalui pembuktian hipotesis inverted U-shaped, dimana hipotesis ini menjelaskan bahwa pada tahap awal pertumbuhan ekonomi, degragdasi lingkungan akan terjadi, tetapi pada tahap puncak pertumbuhannya justru akan mengurangi emisi CO2 bagi lingkungan. Penelitian ini bertujuan untuk menguji keberadaan Environmental Kuznets Curve (EKC) Hypothesis dalam hubungan antara pertumbuhan ekonomi dan emisi karbondioksida di Indonesia selama periode tahun 194-2016. Penelitian ini menggunakan teknik analisis Autoregressive Distributed Lag (ARDL) co-integration. Data yang digunakan merupakan data sekunder yang berasal dari World Bank Development Indicators. Hasil penelitian mengindikasikan bahwa hipotesis EKC tidak terdapat di Indonesia. Selain itu, permodelan jangka panjang menunjukkan bahwa pertumbuhan ekonomi khususnya pada sektor electricity and heat production memberikan dampak positif dan signifikan terhadap emisi karbondioksida di Indonesia. Atas dasar temuan-temuan tersebut, penelitian ini mengisyaratkan adanya kebutuhan mendesak bagi Indonesia untuk menekankan perluasan service intensive economy daripada resource intensive, serta pengembangan sumber-sumber energi terbarukan dalam rangka memitigasi degradasi lingkungan seiring perkembangan dan pertumbuhan ekonomi. The increasing threat of air pollution and global warming has been widely discussed in various international events. Environmental Kuznets Curve (EKC) become an independent research issue and motivated a bulky number of studies that claims an inverted U-shaped relationship between income and CO2 emission : at early stage of development, environmental degradation occurs, but at certain point the increase in economic development will decrease CO2 emission. This study aims to investigate the existing of EKC hypothesis and the dynamic relationship between CO2 emission and economic growth and in Indonesia case the period 1981-2016 using Autoregressive Distributed Lag (ARDL) co-integration framework. Data were retrieved from World Bank Development Indicators. The findings reveal that EKC Hypothesis does not exist. In addition, the long run model show that economy growth appear to have significant positive impact on CO2 emission especially from electricity and heat production. These findings suggest a dire need for Indonesia to shift towards service intensive economy rather than resource intensive, and alternative renewable energy sources in order to mitigate environmental degradation as well as promote economic development.

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A New Insight of the Existence of the Environmental Kuznets Curve in Indonesia

E3S Web of Conferences ◽

10.1051/e3sconf/202020203023 ◽

2020 ◽

Vol 202 ◽

pp. 03023

Author(s):

Andryan Setyadharma ◽

Shanty Oktavilia ◽

Yayu Tika Atmadani ◽

Indah Fajarini Sri Wahyuningrum

Keyword(s):

Natural Resources ◽

Environmental Kuznets Curve ◽

Positive Impact ◽

The Body ◽

Kuznets Curve ◽

Ekc Hypothesis ◽

Economic Activities ◽

Distributed Lag ◽

Autoregressive Distributed Lag

Natural resources play as vital inputs for economic activities, mainly in developing countries. However, massive use of natural resources puts more pressure on the environment and as the result, the quality of environment is deteriorating. The body of economic literature have shown that income is associated with harm to the natural environment. The relationship between income and degradation of the environment is known as the Environmental Kuznets Curve (EKC) hypothesis. Previous studies of EKC hypothesis in Indonesia are still limited and the results are inconclusive due to different results. Therefore, the aim of this study is to present a new insight of the existence of EKC in Indonesia using different method. Most of previous studies of EKC in Indonesia employ Autoregressive distributed lag (ARDL) method, while this study uses data panel regression method from 33 provinces in Indonesia during 2012 to 2018. The result confirms the existence of EKC hypothesis in Indonesia. This study also estimates the turning point, a level of income that starts give positive impact on the environment. This result gives new insight to the existing literature. The policy implication for policymakers are straightforward, i.e. improve wealth of the society through higher income for the protection of the environment.

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