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The productive capacity and environment: evidence from OECD countries
Ihsan Oluc1, Mehdi Ben Jebli2,3, Muhlis Can4
1Department of Economics, Mehmet Akif Ersoy University, Burdur, Turkey.
Environmental Science and Pollution Research International
|August 9, 2022
Summary
This study finds that a stronger productive economic structure, measured by the productive capacity index (PCI), reduces carbon dioxide (CO2) emissions in OECD countries. Enhanced productivity leads to environmental improvements.
Area of Science:
- Environmental Economics
- Econometrics
- Sustainable Development
Background:
- Environmental degradation is a critical global issue.
- Economic structures significantly influence environmental impact.
- The relationship between economic growth, CO2 emissions, and productive capacity requires further investigation.
Purpose of the Study:
- To analyze the dynamic relationship between carbon dioxide (CO2) emissions, economic growth, and the productive capacity index (PCI).
- To examine this relationship for a panel of 38 Organisation for Economic Co-operation and Development (OECD) countries from 2000-2018.
- To test the Environmental Kuznets Curve hypothesis in the context of productive capacity.
Main Methods:
- Application of panel cointegration techniques to establish long-run relationships.
- Utilizing the pooled mean group-panel autoregressive distributive lag (PMG-ARDL) approach.
- Employing the productive capacity index (PCI) as a proxy for a country's economic structure.
Main Results:
- Empirical evidence confirms a long-run cointegration among CO2 emissions, economic growth, and PCI.
- The PMG-ARDL results support the Environmental Kuznets Curve hypothesis.
- An increase in productive capacity is found to significantly decrease CO2 emissions.
Conclusions:
- Improved productive economic structures are crucial for mitigating environmental degradation.
- Policy recommendations are provided for stakeholders to foster sustainable economic development.
- The findings highlight the potential for economic advancement to align with environmental protection.
Keywords:
Economic complexityEnvironmental degradationGreenhouse gassesKnowledge economyOECD economiesProductive capacityMore Related Videos
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