Economic growth and carbon dioxide emissions: An analysis of Latin America and the Caribbean

Abstract

RESUMENEn este trabajo se analiza la relación empírica entre las emisiones de dióxido de carbono (CO 2 ) per cápita y el crecimiento económico en un panel de 20 países de América Latina y el Caribe durante el periodo 1971-2011. Dicha relación empírica, conocida en la literatura económica como la hipótesis de la curva de Kuznets ambiental (CKA), sugiere que la relación entre ambas variables tiene en el largo plazo una relación funcional en forma de U-invertida, es decir, a partir de cierto nivel de renta per cápita, un mayor crecimiento económico iría acompañado de mejoras en la calidad ambiental. Si bien esta hipótesis ha sido estudiada desde la década de 1990, recientemente su validez empírica ha sido cuestionada, entre otras cosas, por la falta de análisis de estacionariedad de las variables, y en un contexto de datos panel, la presencia de dependencia cruzada. Tomando en cuenta ambas críticas, empleamos novedosas pruebas de raíces unitarias y técnicas de cointegración robustas para la presencia de dependencia en el panel. Encontramos resultados contradictorios dependiendo del supuesto de dependencia cruzada entre los países. Bajo el supuesto de independencia cruzada, se confirma la existencia de una CKA con puntos de quiebre realistas. Sin embargo, dicho supuesto es rechazado posteriormente, concluyendo así que en presencia de dependencia cruzada en el panel, no se puede establecer una relación de equilibrio a largo plazo entre las variables, i.e., se rechaza la existencia de una CKA. ABSTRACTThis paper analyzes the empirical relationship between carbon dioxide (CO 2 ) emissions per-capita and economic growth in a panel of 20 Latin American and Caribbean countries over the period 1971-2011. This empirical relationship, known in the economic literature as the Environmental Kuznets Curve (EKC) hypothesis, suggests that the relationship between these variables, in the long run, follows an inverse U-shape, that is, from a certain level of per-capita income, an increased economic growth would be accompanied by improvements in environmental quality. Although this hypothesis has been studied since the 1990s, its empirical validity has recently been questioned on the basis of, among other things, the lack of diagnosis of the stationarity properties of the variables, and in a panel data context, the presence of cross-sectional dependence. Taking into account both criticisms, we use recent unit root tests and cointegration techniques that are robust to the presence of cross-sectional dependence. We find contradictory results depending on the assumption of cross-dependence. Under the assumption of cross-independence, the existence of an EKC with a realistic turning point is confirmed. However, this assumption is subsequently rejected, and because of the presence of cross-dependence in the panel, a long-run equilibrium relationship between the variables cannot be established, and we reject the existence of an EKC.

Exploring the link between environmental pollution and economic growth in EU-28 countries: Is there an environmental Kuznets curve?

“…Further, the Westerlund test [ 119 ] is employed (the outcome is showed in Table 16 ). Contrary to [ 121 ], the null hypothesis of no cointegration between greenhouse gas emissions, economic growth, primary energy consumption, and environmental tax revenues is rejected. Therefore, when the cross-dependence is considered in the panel, there exists a long-run equilibrium relationship between the variables.…”

“…Further, in line with [ 121 ] we perform two categories of stationarity tests, according to their cross-section dependence assumption, respectively the so called first generation that assume cross-section independence ( Table 8 ), as well as the second generation that allow for cross-section dependence between the cross-section units ( Table 9 ). As we can notice, the variables are non-stationary in their levels, but become stationary after taking the first difference.…”

Exploring Asymmetric Nexus Between Tourism, Economic Growth and Co2 Emissions in the Context of Pakistan

“…However, Environmental Kuznets curve (Aydin and Karaman-Kepenekci), shows that economic growth initial increase will initially result in more CO 2 emissions, and when economic growth is increased then eventually CO 2 falls. Ample studies with focus on variables describing economic growth and pollution are existed, but nexus with inconsistent findings (Alam and Paramati, 2016;Dogan and Inglesi-Lotz, 2017;Jardón et al, 2017). Some studies focusing the nexus of country's economic growth and energy consumption.…”

Current Status Investigation and Predicting Carbon Dioxide Emission in Latin American Countries by Connectionist Models

“…Therefore, the amount of CO 2 emission has remained almost constant in other countries. Jardon et al [12] proposed an empirical correlation between the production of carbon dioxide (per capita) and economic issues. In this study, the authors analysed the validation of the hypothesis that in long-term periods, economic growth would be possible if environmental issues are addressed, as well, and rejected this statement for Caribbean and Latin countries.…”