Is there an environmental Kuznets curve for Spain? Fresh evidence from old data

Vicente Esteve () and Cecilio Tamarit

Economic Modelling, 2012, vol. 29, issue 6, 2696-2703

Abstract: The information content of the environmental Kuznets curve (EKC) is subject to change over time and all the empirical modeling work that does not take into account the possible variations and instabilities may fail to explain the variations in the per-capita CO2 and per-capita income relationship. In this paper we consider the possibility that a linear cointegrated regression model with multiple structural changes would provide a better empirical description of the Spanish EKC during the period 1857–2007. Our methodology is based on instability tests recently proposed in Kejriwal and Perron (2008, 2010) as well as on cointegration tests developed in Arai and Kurozumi (2007) and Kejriwal (2008). Overall, the results of Kejriwal–Perron tests suggest a model with two breaks estimated at 1941 and 1967 and three regimes. The coefficient estimated between per-capita CO2 and per-capita income (or long-run elasticity) in a two-break model shows a tendency to decrease over time. Therefore, even if per-capita CO2 consumption is monotonically rising in income, the “income elasticity” is less than one. This implies that even if the shape of the EKC does not follow an inverted U, it shows a decreasing growth path pointing to a prospective turning point.

Keywords: Environmental Kuznets curve; CO2 emissions; Cointegration; Multiple structural breaks (search for similar items in EconPapers)
JEL-codes: C32 Q43 Q53 (search for similar items in EconPapers)
Date: 2012
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (58)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:29:y:2012:i:6:p:2696-2703

DOI: 10.1016/j.econmod.2012.08.016

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