Different Dimensions of Globalization and CO2 Emission Nexus: Application of Environmental Kuznets Curve for Worldwide Perspective

Marc Audi, Muhammad Bilal Ahmad, Khalil Ahmad, Marc Poulin and Amjad Ali

MPRA Paper from University Library of Munich, Germany

Abstract: This study investigates how various facets of globalization directly affect CO₂ emissions under the widely recognized Environmental Kuznets Curve (EKC) framework, utilizing panel data from a broad cross-section of countries. By incorporating economic, political, and social globalization indices alongside macroeconomic variables (GDP per capita, GDP growth, and manufacturing value added), this analysis furnishes a more holistic perspective on the overall globalization–environment nexus. The empirical strategy employs panel unit root tests to evaluate stationarity, followed by ordinary least squares and random effects to secure robust coefficient stability and extended-run insights. The findings validate an inverted U-shaped link between GDP per capita and CO₂ emissions, suggesting that while emissions initially climb with income in early development, they eventually decrease at higher income tiers, in line with the EKC hypothesis. Economic globalization typically shows a positive, albeit occasionally model-sensitive, association with emissions, implying that expanded trade and cross-border production can boost carbon output, particularly when technological or regulatory standards remain weak. In contrast, political and social globalization display weak or negligible direct impacts on CO₂ emissions, implying that diplomatic ties and cultural interactions alone may not fully suffice to curb pollution without complementary environmental measures. Interestingly, expansions in manufacturing value added often align with reduced emissions, underscoring the possible influence of cleaner industrial processes and efficiency improvements. These findings underscore the importance of policy initiatives that reconcile the benefits of global economic integration with rigorous environmental governance. Sustaining inclusive economic progress while mitigating environmental harm relies on constructing stronger institutional frameworks, leveraging targeted technological advances in manufacturing, and fostering global cooperation on emissions criteria.

Keywords: EKC; Economic Globalization; Political Globalization; Social Globalization (search for similar items in EconPapers)
JEL-codes: F60 F62 F64 (search for similar items in EconPapers)
Date: 2025
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