The Impact of Economic Growth, Population, and Energy Consumption on Environmental Degradation: Evidence from OECD Countries

Abstract

This research aims to examine the validity of the Environmental Kuznets Curve (EKC) hypothesis for the environmental degradation measured by Carbon dioxide emission with the role of renewable and non-renewable energy consumption, Gross Domestic Product (GDP), and the population in 37 Organisation for Economic Co-operation and Development (OECD) countries. The research investigates the period from 1960 to 2019 using panel and individual data methodologies. The panel data analysis shows that the inverted N-shaped cubic polynomial model is preferable to the linear and quadratic models. Unlike the GDP, the positive impacts of the parameters fossil fuel use, renewable consumption, and population are affirmed. In the analysis of individual OECD countries, it is found that the pattern of 38% of the countries is consistent with the pattern resulting from the panel data analysis. While the inverted U-shaped EKC pattern is accepted only by 19% of the countries. Almost all countries with high GDP per capita follow inverse patterns (inverted U or inverted N). This pattern is true regarding the consumption of fossil fuels. Almost all the countries with higher renewable energy consumption follow the N-shaped pattern. This is while the countries with lower GDP per capita follow the U- or N-shaped patterns.