Environmental Kuznets Curve Hypothesis

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Simultaneity Modeling Analysis of the Environmental Kuznets Curve Hypothesis

Simultaneity Modeling Analysis of the Environmental Kuznets Curve Hypothesis

Netherlands, West Germany, the United Kingdom, and the United State. They found that economic growth has had a positive effect on pollutant emissions. The empirical results of Martinez-Zarzoso and Begochea-Morancho (2004) are consistent with the EKC hypothesis. In addition, Coondoo and Dinda (2008), Akbostanci et al. (2009), and Lee and Lee (2009) investigated the time series dynamics between output and pollutant emissions to deduce the direction of causality. The empirical results appear to be inconclusive. Additionally, Jaunky (2010) examined the Environmental Kuznets Curve Hypothesis for a sample of 36 high- income countries (including Bahrain, Oman and UAE) covering the period 1980-2005, the findings show that there is evidence of unidirectional causal relationship running from economic growth to pollutant emissions in both the short-run and the long-run. While, Holtz- Eakin and Selden (1995) and Shafik (1994) found a monotonic rising curve and an N-shaped curve has been found by Friedl and Getzner (2003). In addition, Richmond and Kaufmann (2006) found that there is no causal significant relationship between economic growth and pollutant emissions. Moreover, Pao and Tsai (2010) studied this relationship for the BRIC countries over the period 1971-2005, the empirical findings find a unidirectional causal relationship running from emissions to economic growth.
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Environmental Kuznets Curve Hypothesis: A Cross Sectional Study

Environmental Kuznets Curve Hypothesis: A Cross Sectional Study

The two dimensional relationship between economy and the environment is momentous. The environment provides row material and services essential for the development of an economy. On the other hand the economy disseminates industrial wastes and other pollutants in the environment. The inherent waste-disposal capacity of the environment being limited cannot decompose the pollutants at the rate at which they are emitted. This leads to the concentration of threatening pollutants like greenhouse gases, reduces the fertility of soil, adulterates the water reserve, threatens the biodiversity and eventually becomes a culprit to the entire human race. Environmental goods were thought to be abundantly available until the 19 th century. Faster achievement of economic growth became the main objective of all countries. This goal was being fueled by environmental resources which eventually reduced both the stock and quality of the environmental components. Increased population, competitive exploitation of resources, laissez-faire policy and globalization -these factors altogether deteriorated the environmental quality. Pollution became a common reality but not much attention was paid for its regulation. Towards the end of the last century the term sustainable development became a popular as well as influential phrase. Defined by Brunt land Commission (1987) as the development which meets the needs of the present generation without compromising the need of the future generation, the term sustainable development, successfully turned the attention of the policy- maker as well as the public towards conservation of environmental properties.
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Environmental Kuznets curve hypothesis and the role of globalization in selected African countries

Environmental Kuznets curve hypothesis and the role of globalization in selected African countries

The ARDL bounds testing method is only robust in the presence of a single cointegration scenario, among other issues (Bayer and Hanck, 2013) 6 . To overcome some of the deficiencies of the previous cointegration methods including the ARDL method, Bayer and Hanck, (2013) developed a new cointegration technique by combining all non-cointegrating tests to obtain uniform and reliable cointegration results. The application of the combined cointegration test provides robust and efficient results compared to individual t-test. Furthermore, combined cointegration approach is suitable once all the variables have unique order of integration. The results are reported in Table-3. The empirical results show that our calculated F-statistic is greater than tabulated F-statistic i.e. EG-JOH and EG-JOH-BO-BDM at 1% level of significance. This reveals that null hypothesis ‘no cointegration’ is rejected in favor of alternate hypothesis. We may note that cointegration is valid in the case of Africa, Algeria, Angola, Cameroon, Congo Republic, Ghana, Kenya, Libya, Morocco, Nigeria, South Africa, Sudan, Tanzania, Togo, Tunisia, Zambia and Zimbabwe for the period of 1971-2012 and similar is not true for Côte d'Ivoire, Egypt and Gabon. This empirical evidence confirms the robustness of empirical results reported in Table-2 and unveils that cointegration results are consistent and efficient for the period of 1971-2012.
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Does the energy environmental Kuznets curve hypothesis sustain in the Asia Pacific region?

Does the energy environmental Kuznets curve hypothesis sustain in the Asia Pacific region?

We investigated whether the EEKC hypothesis sustains in the Asia-Pacific region for the 1984-2014 period using a panel data including 19 regions of the Asia-Pacific region. Both the panel regression and cointegration models indicated that the EEKC hypothesis holds among the 19 regions of the Asia Pacific region. However, the test performed for low-, middle-, and high- income groups suggested that the EEKC hypothesis only stands for the high-income group and the low- and middle-income groups did not satisfy the hypothesis. This might be implying that although there exists a turning point where the energy consumption per capita begins to decline as the Asia-Pacific regions achieve economic development, such a transition in the energy consumption is only occurring in the developed countries. It could be that regions that are struggling with poverty have no room to implement an energy policy to reduce their energy consumption. It is probable that for such countries, economic development is their higher priority than converting their major energy source from fossil fuels to more efficient energy sources or to spread energy saving technologies.
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Validity test of environmental Kuznets curve hypothesis in turkish economy: application of ardl model

Validity test of environmental Kuznets curve hypothesis in turkish economy: application of ardl model

Long-term model, which is estimated to be able to comment about the direction of the said relationships, of coefficients of variables between which a co-integration relationship is detected is in Table 6. When long term coefficients are evaluated, it was found compatible with the inverse U sign of Environmental Kuznets Curve that the coefficient of GDP variable is statistically significant and its sign is positive and the coefficient of GDP 2 variable is statistically significant and its sign is positive. In other words, national income increase increases environmental pollution at the beginning and income increase decreases environmental pollution after the national income reaches a certain point. In addition to this, energy consumption and industrial production growth in the long-term increases environmental pollution in the relevant period. The coefficient of service production variable is statistically insignificant however when evaluated in the context of its sign the development in the service sector decreases environmental pollution. This situation supports scale effect and composition effect approaches of Environmental Kuznets Hypothesis. In scale effect, development of industrial sector in the country increases environmental pollution. In composition effect, enhancing impact of economic development on environmental pollution disappears with the development of service sector. In the period covered by the model, CUSUM and CUSUM Q test results, which are applied to determine the stability of error terms, are shown in figure 5. If CUSUM and CUSUM Q test statistics are within the limits of 5% significance level, it is understood that the error terms in the model are stable.
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Determinants of CO2 emissions in open economies: testing the environmental Kuznets curve hypothesis (1970 2000)

Determinants of CO2 emissions in open economies: testing the environmental Kuznets curve hypothesis (1970 2000)

One criticism made to cross-section EKC studies is that the historical experience of the economies is not taken into account. For instance, international trade, environmental pol- icy regulations or changes in structure of the economy in‡uence the estimation of the EKC. Hence, the more promising approach is to investigate the time-series data of a single coun- try which may be able to account for historical experience such as environmental policy, development of trade relations, or exogenous shocks such as the oil crisis rather than using reduced form equations of the EKC type presented above.
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Examining the impact of financial development on the environmental Kuznets curve hypothesis

Examining the impact of financial development on the environmental Kuznets curve hypothesis

As mentioned our intention is to explore the effect of financial development and economic growth on environmental degradation. The stock and bond markets differ in the risk involved in investing in both. Investing in bond markets may be less risky in comparison to stock markets as the former is less volatile. At the same time bond prices fluctuate with changes in market sentiments and in different economic circumstances in a significantly different way and from different factors compared to stocks. Different factors like interest rates and economic motivation policies have an influence on both stocks and bonds with opposite reactions. If stocks are in an increasing trend, investors may move away from bonds and towards the booming stock market while if stock markets stabilize or severe economic problems arise, investors return to the safety of bonds. In our case and in all specifications the signs of credit and bond are negative. Stock has the lowest magnitude in all cases and an opposite effect in comparison to bond.
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The Validity of Environmental Kuznets Curve Hypotheis in the Kingdom of Saudi Arabia: ARDL Bounds Testing Approach to Cointegration

The Validity of Environmental Kuznets Curve Hypotheis in the Kingdom of Saudi Arabia: ARDL Bounds Testing Approach to Cointegration

The empirical findings provide evidence on the existence of EKC hypothesis. Jungho (2015) applying the bounds testing (ARDL) approach to cointegration over the period 1960-2010 in Arctic countries, provide little support for the EKC hypothesis. Nicholas& Ilhan (2015) apply the GMM methodology to examine the existence of EKC hypothesis for 14 Asian countries including KSA using panel data for the period 1990- 2011.Their empirical findings provide support to the presence of an Environmental Kuznets Curve hypothesis in Asian countries. Shahbaz et al. (2015a) provides empirical evidence on the existence of the environmental Kuznets curve (EKC) hypothesis in short and long-run among energy consumption, economic growth, trade openness, urbanization, and carbon emissions in Portugal by applying the ARDL bounds testing to cointegration approach for the period 1971 to 2008. Shahbaz et al., (2015b) provide support for Environmental Kuznets Curve (EKC) both in short and long run in Romania over the period 1980 to 2010 by applying the ARDL bounds testing approach to cointegration. O.A. & O. Owoye (2014) examine the applicability of Environmental Kuznets Curve (ECK) in some selected countries over the period 1970 to 2010 using the ARDL bounds testing approach to cointegration. Their empirical results revealed that EKC hypothesis only holds for Japan and South Korea, whereas the N-shaped trajectory holds for the other six countries. Saboor B., and Jamalludin S. (2013) apply the ARDL methodology and the Granger causality test, based on the Vector Error Correction (VECM) Model to examine the validity of EKC in Malaysia for the period 1980-2009. Their empirical results do provide evidence on the existence of EKC for aggregated data, whereas disaggregated data does provide evidence on EKC hypothesis. Khalid and Wei (2013) examine the validity of EKC in Pakistan for the period 1971-2008 using the (ARDL) bound testing approach for cointegration. The empirical findings show support for EKC in long run. Mohamed et al. (2012) implement bootstrap panel unit root tests and cointegration techniques to investigate the existence of EKC for 12 Middle East and North African Countries (MENA) over the period 1981–2005. Their empirical findings revealed poor evidence supporting the existence of EKC hypothesis in MENA countries.
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Income Heterogeneity and Environmental Kuznets Curve in Africa

Income Heterogeneity and Environmental Kuznets Curve in Africa

13 Our work is related to numerous attempts to explain the pollution growth nexus. Most studies test the validity of the so called Environmental Kuznets Curve hypothesis, which postulates an inverted U-shape relationship between environmental degradation and income (Grossman and Krueger, 1994 and 1995; Osabuohien et al., 2014; Beckerman 1992; Stern 2003); while others such as (Agra and Chapman 2008; Galeotti et al., 2006; Coondoo and Dinda 2008) failed to validate the hypothesis. Although numerous studies test the EKC hypothesis, for individual countries (friedl and Getzner 2003; Roca et al., 2001; De Bruyn et al 1998; Roberts and Grimes 1997) and panel of countries (canes et al 2003; stern 2004; Perman and Stern 2003; Huang and Cin 2007) empirics have failed to yield conclusive result (Aslanidis 2009; Soyas and Sari 2009; Bassetti et al.,). Moreover, most empirical studies are considered to be econometrically weak (Stern 2004; Narayan and Narayan, 2010; Brock and Taylor, 2010). In a recent study, Narayan and Narayan 2010 examine the EKC hypothesis in a panel of 43 developing countries using panel cointegration in order to overcome econometric pitfalls. They conclude that CO2 emissions fall as income rises only in Middle Eastern and South Asian countries. Finally, Brock and Taylor (2010) employ the Green Solow model as an alternative framework and present robust evidence of convergence between the 173 countries examined using standard panel technique.
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Abstract: The purpose of this paper is to test the Kuznets Environmental Curve

Abstract: The purpose of this paper is to test the Kuznets Environmental Curve

In addition, Panayotou (1993) broadened the debate by pushing those interested in the issue of the relationship between economic growth and the environment to deepen their research to better identify the nature of this relationship. As a result, much subsequent work has addressed the same issue by adopting different methodologies than Panayotou (1993), or by introducing other factors considered important for analyzing the sources of environmental degradation. These studies tested the KEC hypothesis using different environmental degradation variables. However, the variable that is often used is carbon dioxide emissions. In terms of economic variables, GDP per capita, energy use is often used, but some studies introduce other additional variables, such as trade openness, population, urbanization, and FDI. Lastly, we note that the results of this empirical work are far from reaching consensus, since some confirm the hypothesis of the KEC when others do not. For example, Du et al. (2012) tested the CEK for the case of the Chinese provinces during the period 1990 to 2007. Using fixed-effect panel data modeling and the general method of moments (GMM), Du et al. (2012) succeeded in rejecting the hypothesis of the KEC. This result is shared by other authors, such as the study by Chandran and Tang (2013), Saboori and Sulaiman (2013), and that of Babu and Datta (2013).
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Economic development and environmental quality in Nigeria: is there an environmental Kuznets curve?

Economic development and environmental quality in Nigeria: is there an environmental Kuznets curve?

Lopez and Miltra’s (2000) theoretical postulation that, for any level of per capita income, the rent-seeking activities of government officials raises pollution levels above the social optimum is particularly relevant for a resource dependent economy like Nigeria with very high levels of institutional corruption. Also, according to the Hecksher-Ohlin theorem, several authors have emphasized the role of international trade in shaping the income-environment relation. There is theoretically no consensus on the expected direction and nature of the impact of trade on the environment. Rothman (1998) explains that what may appear to be an improvement in environmental quality as a result of trade may in reality be an indication of the increased ability of consumers to distance themselves from the environmental degradation associated with their consumption; an idea referred to as the pollution heaven hypothesis. Copeland and Taylor (2004) conducted an extensive survey on this issue, and though he acknowledges the links between trade, environment and regulation, he downplays the idea of the pollution heaven hypothesis on grounds of little empirical support.
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Kuznets curve and environmental performance: evidence from China

Kuznets curve and environmental performance: evidence from China

In addition, Song, Zheng and Tong (2008) using panel data models on waste gas emissions for the time period 1985 to 2005 found support of the EKC hypothesis. Similar results have been also reported from Diao, Zeng, Tam, and Tam (2009) for the Zhejiang area of China for the time period of 1995-2005. Furthermore, Brajer, Mead and Xiao (2011) by developing three air pollution measures for Chinese cities tried to establish the existence of an EKC relationship. At the same time they have found that the income-pollution relationship differs by pollutant with some pollutants having periods of decline while others may be continuously increasing. Finally, Halkos and Tzeremes (2011) provided evidence that indicate the presence of an inverted U-shaped curve between CO 2 emissions and economic growth represented by
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Economic Growth and Environmental Degradation in Nigeria: Beyond the Environmental Kuznets Curve

Economic Growth and Environmental Degradation in Nigeria: Beyond the Environmental Kuznets Curve

The Environmental Kuznets Curve (EKC) hypothesis is a presumption that environmental degradation follows an inverted U-shaped trajectory in relation to economic growth. The thorny question of whether economic growth could provide a cure to environmental degradation has sparked off a large body of empirical studies in the last decade. The conclusions have been mixed. This study contributes to the debate on the existence and policy relevance of the EKC for Nigeria by applying autoregressive distributed lag (ARDL) framework to annual time series data from 1960 to 2008. The traditional EKC model is extended by including (in addition to the level, square and cubed values of the income variable), trade openness as well as the shares of manufacturing, agriculture and service sectors in Nigeria’s GDP. Using Co2 emissions per capita to proxy environmental degradation, our findings do not support the existence of the EKC hypothesis. Rather our results show that Nigeria’s situation when confronted with data is exemplified by an N-shaped relationship with a turning point at $77.27 that lies below the data set used for the study. Based on these findings, the paper posit that the hypothesized EKC serves as a dangerous policy guide to solving environmental problems in Nigeria. The conclusion is that to ensure sustainability, there exist an urgent need to look beyond the EKC by adopting courageous policy measures of environmental preservation in Nigeria irrespective of the country’s level of income.
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Environmental Kuznets Curve for CO2 Emission: A Literature Survey

Environmental Kuznets Curve for CO2 Emission: A Literature Survey

(b) Presence of EKC hypothesis: This condition is visible particularly for transitional, emerging, and developed economies. In these cases, the pattern of economic growth is ecologically sustainable, and countries are already in the process of either curbing down fossil fuel based energy consumption, or encouraging clean and renewable energy consumption. Though the chances of pollution export should not be overlooked, these economies are ahead of the others in terms of social development, which is a major catalyst for enhancement of environmental quality. One of the major reasons behind this scenario is that income elasticity of environmental quality demand in these countries is high and rising, and therefore, the level of environmental awareness in also high.
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Environmental Kuznets Curve in Romania and the Role of Energy Consumption

Environmental Kuznets Curve in Romania and the Role of Energy Consumption

Regarding Romania, Atici [26] studies the connections between gross domestic product (GDP) per capita, energy use per capita and trade openness on carbon dioxide (CO2) emission per capita in the Central and Eastern European Countries. The EKC performed for Bulgaria, Hungary, Romania and Turkey, confirms the existence of an EKC for this region. Tamazian and Rao [27] consider 24 transition economies (including Romania) and a panel data for 1993-2004. The authors offer support for the EKC hypothesis, while confirming the importance of both institutional quality and financial development for environmental performance. Sova et al. [29], using a Multilevel Regression Model (MRM), have focused their study on Romanian’s case only. The main finding allows a significant role for collective action and environmental taxes, which suggests some possible policy changes to achieve better environmental outcomes.
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EKC: Static or Dynamic?

EKC: Static or Dynamic?

This paper investigates the robustness of the Environmental Kuznets Curve (EKC), an inverted-U shaped relationship between environmental quality indicators 1 and the level of economic activity or income. Several earlier studies (See, Grossman and Krueger 1995, Selden and Song 1994, de Bruyn et al. 1998, Holtz-Eakin and Selden 1995, Cole et al. 1997, Dinda et al. 2000, Shafik 1994, etc.) have attempted to test the EKC hypothesis empirically with the help of panel data. Most of these studies have used static model for estimation purpose. Little attention has been given in the model specification, especially dynamic model specification in the EKC literature.
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The Environmental Kuznets Curve in ASEAN: The Case of Carbon Emissions

The Environmental Kuznets Curve in ASEAN: The Case of Carbon Emissions

Empirical tests and theoretical debates on EKC have been ongoing since it was discussed in 1992 in the World Development Report 1992: Development and the Environment by the World Bank. Until the mid 1990s, most of the empirical studies concentrated on validating the EKC hypothesis and its requirements by using cross-sectional data. Some of evidence on pollutants supported the validity of EKC, such as the work of Grossman and Krueger (1995) and Selden and Song (1994), while other studies indicated that EKC did not hold at all times and for all pollutants, such as the work of Shafik (1994). Since the late 1990s, the EKC studies have shifted from cross-sectional analyses to time-series analyses, especially analyses for comparing EKC of individual economies in terms of such factors as the height and the timing of their peaks or their shapes as found in the works of, among others, Panayotou (1997) and De Bruyn, Van den bergh and Opschoor (1998).
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Revisiting the Environmental Kuznets Curve in a Global Economy

Revisiting the Environmental Kuznets Curve in a Global Economy

H      . Accordingly Pesaran et al. [44] computes two set of critical value (lower and upper critical bounds) for a given significance level. Lower critical bound is applied if the regressors are I(0) and the upper critical bound is used for I(1). If the F-statistic exceeds the upper critical value, we conclude in favor of a long run relationship. If the F-statistic falls below the lower critical bound, we cannot reject the null hypothesis of no cointegration. However, if the F-statistic lies between the lower and upper critical bounds, inference would be inconclusive. When the order of integration of all the series is known to be I(1) then decision is made based on the upper critical bound. Similarly, if all the series are I(0), then the decision is made based on the lower critical bound. To check the robustness of the ARDL model, we apply diagnostic tests. The diagnostics tests check normality of error term, serial correlation, autoregressive conditional heteroscedasticity, white heteroscedasticity and the functional form of empirical model.
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Environmental Kuznets Curve: An Envelope of Technological Progress

Environmental Kuznets Curve: An Envelope of Technological Progress

Amount of stock of capital is simply the indicator of the stage of economic development. Economy moves from under developed to developed stage mainly with raising stock of capital by accumulation over time. The conceptual idea related to EKC hypothesis actually summarizes essentially this dynamic process of change – viz. as income of an economy grows over time; initially pollution level rises, reaches a peak and then starts declining after a threshold level of income has been crossed. It describes a development trajectory for a single economy that grows through different stages over time. In their process of development individual countries generate income and emission, which also follow one and the same EKC, ceteris paribus. Empirically this development trajectory can be observed in cross-country cross-sectional data, which represents countries belonging to different (low, middle and high) income groups corresponding to their pollution levels. Assuming all countries follow one and the same EKC, at any point of time, it should be observed that poor countries are mostly at the rising part of EKC, developing countries are at the part of EKC where it is approaching the peak or about to cross it and the rich countries are in the falling part of EKC. Now we can relate these observations to the technology prevailing in the economy associated with stock of capital. Considering k is the major indicator for the available technology corresponding to the state of the economy. For given time, technology, A, can be written as
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Environmental Kuznets curve for the Moroccan economy

Environmental Kuznets curve for the Moroccan economy

The Environmental Kuznets Curve (ECK) analyses the relationship between economic growth and environmental deterioration. The traditional view that that economic development and environmental quality are contradictory objectives reflects a pure scale effect and does not take into account technological developments. the ECK hypothesis suppose that once economies reach a certain level of development (turning point), environmental degradation tends to decline due to the use of more strict application of environmental rules and increasing public awareness of environmental issues The aim of this paper is to estimate an environmental Kuznets curve for the Moroccan economy. The objective is to investigate its existence and calculate its turning point. The empirical findings show that the Moroccan economy would observe a reversal of its CO2 emissions by 2040. At this point of time, the real GDP per capita would reach 7800 dollars.
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