Analyzing carbon dioxide emissions and economic growth in low- and high-income countries: an empirical test of the environmental kuznets curve
Date
2022-02-04
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Abstract
This study aims to test the validity of the environmental Kuznets curve (EKC)
hypothesis for high-income and low-income countries. Using data on seven low-
income and 33 high-income countries from 2000 to 2020, the researchers performed fixed-effects and random-effects regressions to test the presence of the hypothesized inverted U-shaped relationship between GDP per capita and CO2 emissions per capita, while controlling for the effects of energy variables and other country-level indicators.
Although the EKC is both valid and significant for the whole panel, tests for the two income sub-groups showed that the relationship is stronger for high-income countries
while inconclusive for the low-income category. In particular, the results showed that
the EKC is valid and significant for the two income groups when no other control
variables were included in the regressions. However, the results slightly changed for
low-income countries when the controls were added to the model, suggesting that
factors other than income are also significant in determining the level of CO2
emissions.
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Keywords
carbon dioxide emission, Environmental Kuznets curve, environmental economics