 Unraveling nonlinear dynamics between urbanization, growth, and emissions in emerging and developing economiesMarco Baudino and Supratim Das Gupta Economic Modelling, 2025, vol. 151, issue C Abstract: This study investigates the nonlinear and causal effects of urbanization and economic growth on CO2 and N2O emissions across 50 emerging and developing economies from 1998 to 2019. Using a semi-parametric approach, panel threshold models, and an IV-2SLS estimator, we capture complex dynamics and address endogeneity in urbanization by leveraging institutional quality as an instrument. Our key novelty lies in uncovering an M-shaped relationship between urbanization and CO2 emissions—peaking at 95% urbanization before declining to 86% at higher levels—while N2O emissions exhibit a persistent linear increase. Causally, economic growth (treatment) increases emissions (outcome), but urbanization moderates this effect, reducing CO2 emissions beyond a threshold of 69.9% urbanization. However, no such mitigating effect is found for N2O. These results call for pollutant-specific policies, promoting cleaner technologies to reduce CO2 while targeting agriculture, waste, and transport to curb N2O. Keywords: Emissions; Growth; Urbanization; Nonlinear estimators; IV-2SLS (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:151:y:2025:i:c:s0264999325001506 DOI: 10.1016/j.econmod.2025.107155 Access Statistics for this article Economic Modelling is currently edited by S. Hall and P. Pauly More articles in Economic Modelling from Elsevier |
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