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Testing environment Kuznets curve (EKC) hypothesis in different regions.

Fatima Bibi1, Muhammad Jamil2

  • 1School of Economics, Quaid-i-Azam University, Islamabad, Pakistan. ifatima.pk1@gmail.com.

Environmental Science and Pollution Research International
|November 13, 2020
PubMed
Summary

The Environment Kuznets Curve (EKC) hypothesis links pollution and economic growth. This study found EKC holds in most regions, but not Sub-Saharan Africa, showing varied environmental-economic relationships globally.

Keywords:
Carbon dioxide emissionEconomic developmentEnvironment Kuznets curve (EKC)Geographic analysisPanel data estimation

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Area of Science:

  • Environmental Economics
  • Econometrics
  • Sustainable Development

Background:

  • The Environment Kuznets Curve (EKC) hypothesis posits an inverted U-shaped relationship between environmental degradation and economic growth.
  • Investigating regional disparities in this relationship is crucial for targeted environmental policies.

Purpose of the Study:

  • To examine the EKC hypothesis for carbon emissions across six diverse global regions from 2000-2018.
  • To determine if the EKC relationship for carbon emissions differs significantly by region.

Main Methods:

  • Panel data econometric models, including random and fixed effects, were employed.
  • A multivariate framework incorporated carbon dioxide emissions, GDP per capita, trade openness, FDI, education, financial development, and institutional quality.

Main Results:

  • The EKC hypothesis was supported in Latin America and the Caribbean, East Asia and the Pacific, Europe and Central Asia, South Asia, and the Middle East and North Africa.
  • The EKC relationship was not supported in the Sub-Saharan Africa region.

Conclusions:

  • The study supports the hypothesis that the EKC relationship between carbon emissions and economic growth varies across different global regions.
  • Findings highlight the need for region-specific environmental and economic development strategies.