Does Clean Energy Reduce Environmental Pollution under the Environmental Kuznets Curve Hypothesis in Sri Lanka?

Eswaran Velayutham ()
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Eswaran Velayutham: School of Business, University of Southern Queensland, Toowoomba, QLD 4350, Australia

Sustainability, 2023, vol. 15, issue 14, 1-16

Abstract: This study explores the nexus among clean energy, economic growth, urbanization, trade openness, and carbon dioxide (CO 2 ) emissions nexus in an emerging economy, Sri Lanka. An autoregressive distributed lag (ARDL) econometric technique and different diagnostic tests are used to investigate the linkages. The pairwise Graner causality approach is applied to investigate the causality direction. The estimated results have confirmed that clean energy and urbanization reduce carbon emissions, whereas trade openness induces carbon emissions in the long run in Sri Lanka. The findings revealed the non-existence of the environmental Kuznets curve (EKC) hypothesis in Sri Lanka. In contrast, the pollution haven hypothesis (PHH) exists between trade openness and carbon dioxide emissions in Sri Lanka. Regarding causal relationships, there is bi-directional causality between clean energy and urbanization. This study reports a unidirectional causality from clean energy to CO 2 emissions, economic development to carbon emissions, urbanization and trade and CO 2 emissions to urbanization and trade. Based on the above findings, this study recommends some policy recommendations.

Keywords: clean energy; economic growth; urbanization; trade openness; CO 2 emission; environmental Kuznets curve; pollution haven hypothesis; emerging economies (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:15:y:2023:i:14:p:10983-:d:1193203

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