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Beyond the inverted U-shape: Challenging the long-term relationship of the Environmental Kuznets Curve hypothesis

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  • Lars Sorge and Anne Neumann

Abstract

This paper empirically tests the validity of the postulated Environmental Kuznets Curve for a panel of 69 countries from 1971 to 2014 which are clustered into all-, high-, middle-, and lower-income groupings. Since the quadratic EKC specification between carbon dioxide emissions and GDP produces highly biased results in favour of an inverted U-shaped pattern, we adopt a cubic formulation and estimate the long-term coefficients signs and significance accounting for country specific slope heterogeneity. Our empirical results rather support a N-shaped than an inverted U-shaped pattern for the pollution income relationship particularly in the all-income panel. We find no evidence of an inverted U-shaped pattern associated with the EKC hypothesis in any panel. Our analysis indicates that promoting economic growth is not a panacea to simply grow out of pollution related problems in the long-term.

Suggested Citation

  • Lars Sorge and Anne Neumann, 2020. "Beyond the inverted U-shape: Challenging the long-term relationship of the Environmental Kuznets Curve hypothesis," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 2).
    • Handle: RePEc:aen:eeepjl:eeep9-1-sorge
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    Cited by:

    1. Adhitya Nugraha & Hermanto Siregar & Idqan Fahmi & Zenal Asikin & Dikky Indrawan & Harianto Harianto & Salis Aprilian, 2024. "Identification of Factors Affecting Net Zero Emission Level in Indonesia," International Journal of Energy Economics and Policy, Econjournals, vol. 14(5), pages 203-210, September.
    2. Masao Tsujimoto, 2024. "Airlines’ Corporate Growth and Environmental Conservation: Evidence from Global Carriers and Forwarders," International Journal of Energy Economics and Policy, Econjournals, vol. 14(3), pages 260-280, May.
    3. Masao Tsujimoto, 2023. "Public Utilities Corporate Growth and Environmental Conservation: Evidence from Japan," International Journal of Energy Economics and Policy, Econjournals, vol. 13(4), pages 404-422, July.
    4. Gao, Jinchao & Hassan, Muhammad Shahid & Kalim, Rukhsana & Sharif, Arshian & Alkhateeb, Tarek Tawfik Yousef & Mahmood, Haider, 2023. "The role of clean and unclean energy resources in inspecting N-shaped impact of industrial production on environmental quality: A case of high polluting economies," Resources Policy, Elsevier, vol. 80(C).
    5. Masao Tsujimoto, 2022. "Achievement of both Growth and Environmental Conservation by Digital Platform Providers," International Journal of Energy Economics and Policy, Econjournals, vol. 12(4), pages 78-86, July.

    More about this item

    JEL classification:

    • F0 - International Economics - - General

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