Are environmental Kuznets curves misleading us? The case of CO₂ emissions

Abstract

Environmental Kuznets curve (EKC) analysis links changes in environmental quality to national economic growth. The reduced form models, however, do not provide insight into the underlying processes that generate these changes. We compare EKC models to structural transition models of per capita CO2 emissions and per capita GDP, and find that, for the 16 countries which have undergone such a transition, the initiation of the transition correlates not with income levels but with historic events related to the oil price shocks of the 1970s and the policies that followed them. In contrast to previous EKC studies of CO2 the transition away from positive emissions elasticities for these 16 countries is found to occur as a sudden, discontinuous transition rather than as a gradual change. We also demonstrate that the third order polynomial 'N' dependence of emissions on income is the result of data aggregation. We conclude that neither the 'U'- nor the 'N'-shaped relationship between CO2 emissions and income provide a reliable indication of future behaviour.

Economic growth and atmospheric pollution in Spain: discussing the environmental Kuznets curve hypothesis

“…This is different from other rich countries, which in most cases had a "peak" of emissions in 1973 (Moomaw and Unruh, 1997). This shows a specific delay in the Spanish economy's adjustment to the new situation of sharp increases in energy prices.…”

How economic growth, renewable electricity and natural resources contribute to CO2 emissions?

“…The first wave of EKC studies used basic EKC models, and both economic growth and its environmental impacts were estimated without any explanatory variables (Beckerman, 1992;Krueger, 1991, 1995;Holtz-Eakin and Selden, 1995;Moomaw and Unruh, 1997;Schmalensee et al, 1998;Heil and Selden, 2001;etc. ) to test the relationship between economic growth and environmental pollution using the EKC framework.…”

“…On the other hand, an N-shaped EKC predicts an increase in the income-environmental pollution relationship over the long term (Shafik and Bandyopadhyay, 1992;Selden and Song, 1994;Grossman and Krueger, 1995;Moomaw and Unruh, 1997;Torras and Boyce, 1998 (Johansson and Kriström, 2007;Lorente and Álvarez-Herránz, 2016;Álvarez -Herránz et al, 2017).…”

The income–environment relationship: Evidence from a binary response model

“…One can further question the interpretation of a significant estimate for income cubed. Moomaw and Unruh (1997) argue for instance that a significant cubic term in per capita GDP is the result of data aggregation. If this is the case, a significant estimate for this cubic term casts doubt on the proper interpretation of the other income variables.…”