Assessment on the Applicability of Environmental Kuznets Curve Hypothesis on the Macroeconomic Factors Driving Carbon Dioxide Emissions in the Philippines

Since there is a lack of empirical literature in the Philippines that focuses on studying the validity of the Environmental Kuznets Curve Hypothesis, this study aims to build on succeeding studies testing the validity of the EKC hypothesis in the country. In the current study, we empirically investigate the long-run relationship between the annual Philippine Carbon Dioxide (CO2) emissions as the proxy variable for Environmental Degradation, Gross Domestic Product per capita, net inflows of Foreign Direct Investment, Renewable Energy per capita, specifically for the period of 1981 - 2019. This paper also observed the Johansen Cointegration results in critically assessing whether the variables were conclusive to test in the long-run measure. For that reason, we investigated the validity of the EKC hypothesis by utilizing the ARDL long bound approach. Thus, our results revealed that a long-run relationship exists, but interestingly, the Environmental Kuznets Curve Hypothesis does not exist in the Philippines.

Nexus Between CO2 Emissions, Energy Use and Economic Growth in Nepal

Background: Economic growth in different economies comes with a cost of environmental degradation. The environment-growth nexus has come to the spotlight since scientists as well as policy-makers point out the threat of climate change and global warming all around the world. Nepal faces problems of pollution day by day raising a question about sustainable growth in the country. Such sustainability can be achieved by exploiting the water resources of the country which can be further used to generate cleaner forms of energy. Objective: This paper examines the interconnection between environmental degradation and economic growth in Nepal under the Environmental Kuznets curve’s framework and causal framework. These frameworks also incorporate energy variables such as electricity production, electricity and oil consumption at a disaggregated level to understand the energy growth nexus in Nepal. Method: The Auto-Regressive Distributed Lag model followed by TY Non-Granger Causality tests and variance decompositions are incorporated in the study to examine the EKC hypothesis and the nexus between energy and growth is analyzed through a multivariate framework. Result: Our result does not show the presence of the EKC hypothesis in the case of Nepal. However, the causal framework indicated that a percentage increase in electricity generation would lead to a reduction in carbon dioxide by 0.7%. The variance decomposition results showed that the impact of CO2 on GDP would decrease with horizons getting longer. On the other hand, the impact of electricity generation on CO2 on was found to be 78% in the longer horizon. Conclusion: Nepal should harness its potential of generating hydroelectricity to reduce environmental pollution as well as increase economic growth. Substituting the cleaner form of energy such as hydroelectricity can help in reducing the consumption of fossils and fuels as well as help in mitigating the pollution level in Nepal. This will further allow Nepal to be self-reliant since it has huge potential for generating hydroelectricity.

Can labor productivity growth reduce carbon emission? Evidence from OECD countries and China

PurposeThe purpose of this study is to examine the challenges involved in the trade-offs of labor productivity and per capita carbon dioxide (CO2) emission.Design/methodology/approachIn this research, we used a balanced dataset of 36 OECD countries and China between 1990 and 2018. We examined the relationship between labor productivity and per capita CO2 emission for OECD countries and China based on an Environmental Kuznets Curve (EKC) hypothesis. Further, the fixed effects model of estimation was employed to examine the impact of variables during the sample period and explore the relationship between predictor and outcome variables within an entity while controlling for all time-invariant differences.FindingsThis study confirmed the existence of the N-shape EKC hypothesis in 36 OECD countries and China. This implies that at the initial development stage, per capita CO2 emission increased with labor productivity; however, after reaching certain threshold, per capita CO2 emission began to fall with rising labor productivity. Then the per capita CO2 emission rises again when labor productivity continually increases.Originality/valueIn this study, we explored the dynamic association between labor productivity and per capita CO2 emissions for 36 OECD countries and China under the EKC framework from 1990 to 2018 by using the labor productivity and per capita CO2 emission as economic and environmental indicators of one country respectively. This study’s contribution showed the following: first, the empirical findings confirmed the N-shape relationship between labor productivity and per capita CO2 emissions for 36 OECD countries and China; second, the findings demonstrated that the association among the underlying variables by testing through the fixed effect model.

Does agricultural development affect environmental quality? The case of carbon dioxide emission in Ghana

PurposeAgricultural development still constitutes an integral part of Ghana's drive towards job creation, industrial development and economic growth with various growth policies placing the agricultural sector at the core. While there are likely environmental effects of agricultural activities, evidence in Ghana remains scanty. The study focused on examining, empirically, the effects of the development of the agricultural sector on carbon dioxide (CO2) emission in Ghana.Design/methodology/approachThe paper employed the Stochastic impacts by regression on population, affluence and technology (STIRPAT) framework to test for the environmental Kuznets curve (EKC) hypothesis for agriculture and carbon dioxide emission as well as the effect that the changing structure of Ghana's agricultural development has on carbon dioxide emission for the 1971–2018 period. Regression analysis, variance decomposition and causality analysis were performed.FindingsThe regression results revealed a U-shaped relationship between agricultural development and carbon emission, implying a rejection of the EKC hypothesis between the two variables. In addition, the Structural Adjustment Programme was found to positively moderate the effect agriculture has on carbon emission.Practical implicationsThe study recommends the need for policy-makers to facilitate the large-scale adoption and use of modern technology and environmentally friendly agricultural methods.Originality/valueThe study is among the few works to assess the EKC hypothesis between agriculture and carbon dioxide emission in Africa. The direct and indirect effect of structural adjustment programme on carbon emission is estimated.

Investigating the validity of the agricultural-induced environmental Kuznets curve (EKC) hypothesis for Ghana: evidence from an autoregressive distributed lag (ARDL) approach with a structural break

PurposeThe purpose of this research is to examine the validity of the agriculture-induced environmental Kuznets curve (EKC) hypothesis with evidence from an autoregressive distributed lag (ARDL) approach with a structural break including real income and energy consumption in the model for Ghana over the period 1980–2014.Design/methodology/approachThe ARDL approach with a structural break was used to analyze the agriculture-induced EKC model which has not been studied in Ghana. The dynamic ordinary least squares (DOLS), canonical cointegration regression (CCR) and fully modified ordinary least squares (FMOLS) econometric methods were further used to validate the robustness of the estimates, and the direction of the relationship between the study variables was also clarified using the Toda–Yamamoto Granger causality test.FindingsThe ARDL results revealed that GDP, energy consumption and agricultural value added have significant positive effects on CO2 emissions, while GDP2 reduces CO2 emissions. The Toda-Yamamoto causality test results show a bidirectional causality running from GDP and energy consumption to CO2 emissions whereas a unidirectional long-term causality runs from GDP2 and agriculture value-added to CO2 emissions.Practical implicationsThis finding validated the presence of the agriculture-induced EKC hypothesis in Ghana in both the short run and long run, and the important role of agriculture and energy consumption in economic growth was confirmed by the respective bidirectional and unidirectional causal relationships between the two variables and GDP. Thus, a reduction in unsustainable agricultural practices is recommended through specific policies to strengthen institutional quality in Ghana for a paradigm shift from rudimentary technology to modern sustainable agrarian technologies.Originality/valueThis study is novel in the EKC literature in Ghana, as no study has yet been done on agriculture-induced EKC in Ghana, and the other EKC studies also failed to account for structural breaks which have been done by this study. This study further includes a causality analysis to examine the direction of the relationship which the few EKC studies in Ghana failed to address. Finally, dynamic ordinary least squares (DOLS), canonical cointegration regression (CCR) and fully modified ordinary least squares (FMOLS) methods are used for robustness check, unlike other studies with single methodologies.

Investigating The Environmental Kuznets Curve (Ekc) Hypothesis For India: Does India Have Enough Capital To Supplement Renewable Energy Usage In The Correction of Carbon Emissions?

India’s sustainable development goals consist of higher economic growth through strengthening of the manufacturing sector on the one hand and ambitious carbon emission reduction plans through increased renewables on the other. This paper studies the dynamic association between CO2 emissions, economic growth, renewable energy (RE) consumption and gross capital formation and tests for the existence of Environmental Kuznets Curve (EKC) hypothesis for India over the time period 1970-2018. It also tries to see if there is any possible conflict between the economic and energy goals using an interaction term between RE consumption and gross capital formation. The empirical results not only confirm long run relationship among the underlying variables but also indicate an ‘N’ shaped EKC in the long run for India indicating a departure from the traditional inverted U-shaped EKC hypothesis. RE consumption is found to reduce emissions, whereas gross capital formation and the interaction term between RE consumption and gross capital formation are found to raise emissions in the long run. The study concludes that India needs to align its economic policy of ‘Make in India’ with its energy policy so that investments under the former facilitate extensive penetration, adaptation and usage of renewable energy. A policy dichotomy between the two goals may defeat India’s INDC objective of drastic reduction in CO2 emissions through increased renewables by 2030.

Revisiting the Existence of EKC Hypothesis under Different Degrees of Population Aging: Empirical Analysis of Panel Data from 140 Countries

Population aging and environmental sustainability have become two hot topics in the world today. To clarify whether the Environmental Kuninets Curve (EKC) hypothesis between the economy and the environment is still valid in the context of population aging is the key to reveal the complexity of social-ecological systems in aging societies. So far, the impact of population aging on the environment has not been clear. To this end, an empirical analysis on the threshold panel model was conducted using panel data of 140 countries from 2000 to 2015. The global findings suggest that economic growth was the main reason for the increase in the ecological footprint at the beginning of aging. However, deepening aging weakened this association between economic and ecological footprints. For high-income countries, with the deepening of aging, the economic and ecological footprints were firstly negatively correlated, then positively correlated, and finally negatively correlated. In other words, the EKC hypothesis remained valid in high-income countries as aging deepened. In contrast, for the low- and middle-income group, the economic-environmental association was not affected by the degree of aging. This result sheds light on the variability of different income country groups in coping with the environmental impacts of aging. For the high-income group, policy makers should pay attention to the aging threshold in socio-ecological management. Only in this way can the development of aging and the ecological environment be reconciled to the greatest extent.

Impact of Economic Structure on the Environmental Kuznets Curve (EKC) hypothesis in India

This study aims to evaluate the impact of economic structure on the Environmental Kuznets Curve (EKC) in India. The present study deviates from the bulk of study in the literature with the incorporation of both aggregated and disaggregated measures of economic development on the environmental degradation function. For the empirical analysis, the study employed the Auto-Regressive Distributed Lag (ARDL) bounds testing approach of cointegration to analyse the long-run and short-run relationship during 1971–2014. Further, the direction of the causality is investigated through the Wald test approach. The results revealed that the conventional EKC hypothesis does not hold in India in both aggregated and disaggregated models since economic growth and its component have a U-shaped impact on the environmental quality in India. However, the effect of population on environmental quality is positive but not significant in the aggregated model. Whereas, in the disaggregated model, it is significantly affecting environmental quality. Hence, it is possible to infer that the population of the country increases, the demand for energy consumption increase tremendously, particularly consumption of fossil fuel like coal, oil, and natural gas, and is also evident from the energy structure coefficient from both models. This increase is due to the scarcity of renewable energy for meeting the needs of people. On the contrary, urbanization reduces environmental degradation, which may be due to improved living conditions in terms of efficient infrastructure and energy efficiency in the urban area leading to a negative relation between urbanization and environmental degradation.