Does the Environmental Kuznets Curve Hold across Sectors? Evidence from Developing and Emerging Economies

Supratim Das Gupta, Marco Baudino and Saikat Sarkar
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Supratim Das Gupta: Amrut Mody School of Management, Ahmedabad University, Ahmedabad, India
Marco Baudino: Université Côte d'Azur, CNRS, GREDEG, France
Saikat Sarkar: Department of Economics & Politics, Visva Bharati University, Santiniketan, India

No 2024-17, GREDEG Working Papers from Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France

Abstract: This paper explores the growth-energy-pollution nexus of the environmental Kuznets curve (EKC) considering the joint contribution to CO2 emissions of the different sectors of the economy for a set of 43 emerging and developing countries. Since energy consumption and contribution to GDP growth can vary remarkably among sectors, the latter are likely to be characterized by heterogeneous responses to pollution from macroeconomic factors. We adopt an index decomposition approach disentangling the effect of energy consumption from intra-sectoral shifts in economic activities, which allows to evaluate improvements in energy efficiency across sectors. For the empirical analysis, we employ System and Difference GMM estimations using longitudinal obser- vations from 1998 to 2019. Our econometric results reveal substantial heterogeneity of responses to carbon dioxide reduction across sectors. Particularly, we validate the exis- tence of the EKC in energy-related measures for the sole manufacturing sector, and in GDP growth for the commercial and public sector. On the other hand, while emissions increase proportionately with growth in the transportation sector, energy efficiency measures seem to be ineffective in curtailing emissions in both the transportation and commercial and public sectors. Our results bear recommendations for the achievement of effective carbon neutrality policies.

Keywords: Environmental Kuznets Curve; Energy Intensity Decomposition; CO2 Emissions (search for similar items in EconPapers)
JEL-codes: O13 Q01 Q53 (search for similar items in EconPapers)
Pages: 47 pages
Date: 2024-06
New Economics Papers: this item is included in nep-agr, nep-eff, nep-ene, nep-env, nep-mac and nep-res
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