Relationships among Carbon Emissions, Economic Growth, Energy Consumption and Population Growth: Testing Environmental Kuznets Curve Hypothesis for Brazil, China, India and Indonesia

Abstract

This study examines the impacts of income, energy consumption and population growth on CO2 emissions by employing an annual time series data for the period 1970-2012 for India, Indonesia, China, and Brazil. The study used the Autoregressive Distributed Lag (ARDL) bounds test approach considering both the linear and non-linear assumptions for related time series data for the top CO2 emitter emerging countries in both the short run and long run. The results show that CO2 emissions have increased statistically significantly with increases in income and energy consumption in all four countries. While the relationship between CO2 emissions and population growth was found to be statistically significant for India and Brazil, it has been statistically insignificant for China and Indonesia in both the short run and long run. Also, empirical observations from the testing of environmental Kuznets curve (EKC) hypothesis imply that in the cases of Brazil, China and Indonesia, CO2 emissions will decrease over the time when income increases. So based on the EKC findings, it can be argued that these three countries should not take any actions or policies, which might have conservative impacts on income, in order to reduce their CO2 emissions. But in the case of India, where CO2 emissions and income were found to have a positive relationship, an increase in income over the time will not reduce CO2 emissions in the country.

An Environmental Kuznets Curve for N2O emissions in Germany: an ARDL approach

“…Economic growth and the environment are two distinct phenomena, but their relationship in both the short run and long run is undeniable (Alam et al , ). Few studies have analysed N 2 O emissions as an indicator of pollution, despite the importance of this GHG at the global level (United States Environmental Protection Agency (EPA), ).…”

“…Overall, the study shows that contrary to EKC in less developed countries, mitigation of N 2 O emissions does not negatively affect growth in Germany. It is thus feasible to undertake any conservative policy in order to reduce N 2 O emissions without major consequences on economic sectors (Alam et al , ). Empirical observations from the testing of the EKC hypothesis imply that for Germany, when income increased, N 2 O emissions started to decrease.…”

“…Testing the existence of an EKC has received considerable attention in the last few decades. As mentioned in the introduction, the EKC hypothesis asserts that as national or regional output increases, GHG emissions increase until a threshold level of output is reached, after which emissions decline and environmental conditions improve (Grossman and Krueger, ; Shafik and Bandyopadhyay, ; Alam et al , ). That is, there is an inverted U‐shaped relationship between economic growth and environmental degradation ( K uznets, ; Shafik, ).…”

“…The framework of analysis is by testing the Environmental Kuznets Curve (EKC) hypothesis. The EKC hypothesis asserts that as national or regional output increases, GHG emissions increase until a threshold level of output is reached, after which emissions decline and environmental conditions improve (Grossman and Krueger, ; Shafik and Bandyopadhyay, ; Alam et al , ). The testing approach consists of estimating autoregressive distributive lag (ARDL) bounds and cointegration models.…”

“…The testing approach consists of estimating autoregressive distributive lag (ARDL) bounds and cointegration models. The ARDL approach has been used in similar settings to test the EKC hypothesis; for example, it was used to analyse the potential of renewable energy sources in reducing the impact of GHG emissions in Turkey (Bölük and Mert, ) and examining the impacts of income, energy consumption and population growth on carbon dioxide (CO 2) emissions in India, Indonesia and China (Soytas and Sari, ; Alam et al , ). Results show evidence of the existence of an EKC in Germany both in the short and long run.…”