Abstract
In this paper, we revisit the environmental Kuznets curve (EKC) hypothesis by using estimations that account for cross-sectional dependency (CSD) and asymmetry effect in 76 countries for the period 1971–2014. Our results lend moderate support to the EKC hypothesis. The country-specific results unfold that a total of 16 out of 76 countries support the EKC hypothesis using CCEMG estimator. Results from AMG reveal that the EKC hypothesis holds in 24 out of 76 countries. It is worth highlighting that 11 countries (Australia, China, Congo Dem. Rep., Costa Rica, Gabon, Hong Kong, India, Korea, Myanmar, Turkey, and Uruguay) exhibit an inverted U-shaped curve regardless of whether CCEMG or AMG is used. The asymmetry analysis using PMG is also able to support the EKC hypothesis. We conclude that the EKC hypothesis does not fit all countries. Policy implication and recommendation in designing appropriate energy and economic policies are provided.
Similar content being viewed by others
References
Alam MM, Murad MW, Noman AHM, Ozturk I (2016) Relationships among carbon emissions, economic growth, energy consumption and population growth: testing environmental Kuznets curve hypothesis for Brazil, China, India and Indonesia. Ecol Indic 70:466–479
Amri F (2018) Carbon dioxide emissions, total factor productivity, ICT, trade, financial development, and energy consumption: testing environmental Kuznets curve hypothesis for Tunisia. Environ Sci Pollut Res 25(33):33691–33701
Apergis N (2016) Environmental Kuznets curves: new evidence on both panel and country-level CO2 emissions. Energy Econ 54:263–271
Apergis N, Ozturk I (2015) Testing environmental Kuznets curve hypothesis in Asian countries. Ecol Indic 52:16–22
Apergis N, Payne JE (2009) Energy consumption and economic growth: evidence from the commonwealth of independent states. Energy Econ 31:641–647
Atasoy BS (2017) Testing the environmental Kuznets curve hypothesis across the US: evidence from panel mean group estimators. Renew Sust Energ Rev 77:731–747
Baek J (2015) A panel cointegration analysis of CO 2 emissions, nuclear energy and income in major nuclear generating countries. Appl Energy 145:133–138
Baltagi B, Feng Q, Kao C (2012) A Lagrange multiplier test for cross-sectional dependence in a fixed effects panel data model. J Econ 170(1):164–177. https://doi.org/10.1016/j.jeconom.2012.04.004
Bastola U, Sapkota P (2015) Relationships among energy consumption, pollution emission, and economic growth in Nepal. Energy 80:254–262
Bento JPC, Moutinho V (2016) CO2 emissions, non-renewable and renewable electricity production, economic growth, and international trade in Italy. Renew Sust Energ Rev 55:142–155
Bertinelli L, Strobl E (2005) The environmental Kuznets curve semi-parametrically revisited. Econ Lett 88:467–481
Bond S, Eberhardt M (2009) ‘Cross-section dependence in nonstationary panel models: a novel estimator’, paper presented at the Nordic econometrics conference in Lund
Breusch T, Pagan A (1980) The Lagrange multiplier test and its applications to model specification in econometrics. Rev Econ Stud 47(1):239–253. https://doi.org/10.2307/2297111
Churchill SA, Inekwe J, Ivanovski K, Smyth R (2018) The environmental Kuznets curve in the OECD: 1870–2014. Energy Econ 75:389–399
Cialani C (2007) Economic growth and environmental quality. Management of Environmental Quality: An International Journal 18(5):568-577
Destek M, Sarkodie S (2019) Investigation of environmental Kuznets curve for ecological footprint: the role of energy and financial development. Sci Total Environ 650:2483–2489
Eberhardt M, Teal F (2011) Econometrics for grumblers: a new look at the literature on cross-country growth empirics. J Econ Surv 25(1):109–155
Farhani S, Solarin SA (2017) Financial development and energy demand in the United States: new evidence from combined cointegration and asymmetric causality tests. Energy 134:1029–1037
Focacci A (2003) Empirical evidence in the analysis of the environmental and energy policies of a series of industrialised nations, during 1960-1997, using widely employed macroeconomic indicators. Energy Policy 31(4):333–352
Friedl B, Getzner M (2003) Determinants of CO2 emission in a small open economy. Ecol Econ 45:133–148
Grossman GM, Krueger AB (1991) Environmental impacts of a North American free trade agreement (National Bureau of economic research no. 3914). National Bureau of Economic Research, Cambridge
International Energy Agency (2017) Global energy demand grew 2.1% in 2017; and carbon emissions rose for the first time since 2014. Retrieved from https://www.iea.org/newsroom/news/2018/march/global-energy-demand-grew-by-21-in-2017-and-carbon-emissions-rose-for-the-firs.html
Jalil A, Mahmud SF (2009) Environment Kuznets curve for CO2 emissions: a cointegration analysis for China. Energy Policy 37:5167–5172
Jin T, Kim J (2020) Investigating the environmental Kuznets curve for Annex I countries using heterogeneous panel data analysis. Environ Sci Pollut Res:1–6
Lau LS, Choong CK, Ng CF, Liew FM, Ching SL (2019) Is nuclear energy clean? Revisit of environmental Kuznets curve hypothesis in OECD countries. Econ Model 77:12–20
Li T, Wang Y, Zhao D (2016) Environmental Kuznets curve in China: new evidence from dynamic panel analysis. Energy Policy 91:138–147
Liu X, Zhang S, Bae J (2017) The impact of renewable energy and agriculture on carbon dioxide emissions: investigating the environmental Kuznets curve in four selected ASEAN countries. J Clean Prod 164:1239–1247
Narayan PK, Narayan S (2010) Carbon dioxide emissions and economic growth: panel data evidence from developing countries. Energy Policy 38(1):661-666
Nasir M, Rahmen FU (2011) Environmental Kuznets curve hypothesis in Pakistan: an empirical investigation. Energy Policy 39:1857–1864
Ng CF, Choong CK, Ching SL, Lau LS (2019) The impact of electricity production from renewable and non-renewable sources on CO2 emissions: evidence from OECD countries. Int J Bus Soc 20(1):365–182
Pesaran M (2004) General diagnostic tests for cross section dependence in panels. CESifo working paper series 1229, CESifo Group Munich
Pesaran M (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica 74(4):967–1012
Pesaran M (2007) A simple panel unit root test in the presence of cross-section dependence. J Appl Econ 22(2):265–312. https://doi.org/10.1002/jae.951
Pesaran MH, Shin Y (1998) An autoregressive distributed-lag modelling approach to cointegration analysis. Econometric Society Monographs 31:371–413
Pesaran MH, Shin Y, Smith RP (1999) Pooled mean group estimation of dynamic heterogeneous panels. J Am Stat Assoc 94(446):621-634
Rafailidis P, Katrakilidis C (2014) The relationship between oil prices and stock prices: a nonlinear asymmetric cointegration approach. Appl Financ Econ 24(12):793–800
Rezek JP, Rogers K (2008) Decomposing the CO2-income tradeoff: an output distance function approach. Environ Dev Econ 13:457–473
Saboori B, Sapri M, Baba M (2014) Economic growth, energy consumption and CO2 emissions in OECD (organization for economic cooperation and development)’s transport sector: a fully modified bidirectional relationship approach. Energy 66:150–161
Salisu AA, Isah KO (2017) Revisiting the oil price and stock market nexus: a nonlinear panel ARDL approach. Econ Model 66:258–271
Salisu AA, Isah KO, Oyewole OJ, Akanni LO (2017) Modelling oil price-inflation nexus: the role of asymmetries. Energy 125:97–106
Sarkodie SA, Strezov V (2019) Effect of foreign direct investments, economic development and energy consumption on greenhouse gas emissions in developing countries. Sci Total Environ 646:862–871
Shahbaz M, Van Hoang TH, Mahalik MK, Roubaud D (2017) Energy consumption, financial development and economic growth in India: new evidence from a nonlinear and asymmetric analysis. Energy Econ 63:199–212
Shahbaz M, Haouas I, Van Hoang TH (2019) Economic growth and environmental degradation in Vietnam: is the environmental Kuznets curve a complete picture? Emerg Mark Rev 38:197–218
Wang SJ, Zhou C, Li G, Feng K (2016) CO2 , economic growth, and energy consumption in China’s provinces: Investigating the spatiotemporal and econometric characteristics of China’s CO2 emissions. Ecol Indic 69:184–195
Westerlund J (2007) Testing for error correction in panel data. Oxf Bull Econ Stat 69(6):709–748. https://doi.org/10.1111/j.1468-0084.2007.00477.x
WMO climate statement: past 4 years warmest on record (2019) Retrieved from https://public.wmo.int/en/media/press-release/wmo-climate-statement-past-4-years-warmest-record
Zanin L, Marra G (2012) Assessing the functional relationship between CO2 emissions and economic development using an additive mixed model approach. Econ Model 29:1328–1337
Zhang X, Cheng X (2009) Energy consumption, carbon emissions, and economic growth in China. Ecol Econ 68(10):2706–2712
Zhang C, Wang Y, Song X, Kubota J, He Y, Tojo J, Zhu X (2017) An integrated specification for the nexus of water pollution and economic growth in China: panel cointegration, long-run causality and environmental Kuznets curve. Sci Total Environ 609:319–328
Author information
Authors and Affiliations
Corresponding author
Additional information
Responsible editor: Nicholas Apergis
Publisher’s note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Ng, CF., Choong, CK. & Lau, LS. Environmental Kuznets curve hypothesis: asymmetry analysis and robust estimation under cross-section dependence. Environ Sci Pollut Res 27, 18685–18698 (2020). https://doi.org/10.1007/s11356-020-08351-w
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s11356-020-08351-w