Testing the Environmental Kuznets Curve Hypothesis in North America’s Free Trade Agreement (NAFTA) Countries

Raul Arango Miranda, Robert Hausler, Rabindranarth Romero Lopez, Mathias Glaus and Jose Ramon Pasillas-Diaz
Additional contact information
Raul Arango Miranda: Station Expérimentale des Procédés Pilotes en Environnement, École de Technologie Supérieure, Université du Québec, 1100 rue Notre-Dame Ouest Local A-1500, Montréal, QC H3C 1K3, Canada
Robert Hausler: Station Expérimentale des Procédés Pilotes en Environnement, École de Technologie Supérieure, Université du Québec, 1100 rue Notre-Dame Ouest Local A-1500, Montréal, QC H3C 1K3, Canada
Rabindranarth Romero Lopez: Unidad de Investigación Especializada en Hidroinformática y Tecnología Ambiental, Facultad de Ingeniería Civil, Universidad Veracruzana, Lomas del Estadio s/n, Zona Universitaria, Xalapa, Veracruz, CP 91000, Mexico
Mathias Glaus: Station Expérimentale des Procédés Pilotes en Environnement, École de Technologie Supérieure, Université du Québec, 1100 rue Notre-Dame Ouest Local A-1500, Montréal, QC H3C 1K3, Canada
Jose Ramon Pasillas-Diaz: Departamento de informática, Universidad Autónoma de Zacatecas, Carretera Zacatecas-Guadalajara Km. 6, Ejido “La Escondida”, Zacatecas, CP 98160, Mexico

Energies, 2020, vol. 13, issue 12, 1-13

Abstract: In force since 1994, the North American Free Trade Agreement (NAFTA) is still the most comprehensive agreement ever developed, conforming to the world’s largest trade market. However, the environmental impacts cannot be neglected, particularly greenhouse gas emissions. The environmental Kuznets curve (EKC) hypothesis is revisited, studying Canada, Mexico, and the U.S.A. in relation to carbon dioxide (CO 2 ) emissions, gross domestic product (GDP), energy, and exergy consumption. Ordinary least squares, vector autoregression, and Granger causality tests are conducted. Additionally, exergy indicators and the human development index (HDI) are proposed. Results for Mexico and the U.S.A. describe similar and interesting outcomes. In the search of the environmental Kuznets curve (EKC), the EKC hypothesis is confirmed for Mexico and the U.S.A. However, for Canada, the EKC hypothesis does not stand. The Granger causality test displays the existence of a uni-directional causality running from CO 2 emissions to economic growth; a similar behavior was observed while testing the for the exergetic control variables. The most intriguing Granger causal results are those from the U.S.A. A bidirectional relation was observed between exergy intensity and CO 2 emissions. Moreover, the EKC curve was plotted by both variables. Furthermore, Mexico’s outcomes reveal that increasing renewable exergy share will decrease CO 2 emissions. On the contrary, increasing HDI will grow CO 2 emissions. Policy implications arise for NAFTA countries to minimize CO 2 emissions by means of the growing renewable energy share. Exergy tools offer an appealing insight into energetic and environmental strategies.

Keywords: climate change; economic growth; energy policy; exergy analysis; environmental Kuznets curve; NAFTA; greenhouse gases (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

Downloads: (external link)
https://www.mdpi.com/1996-1073/13/12/3104/pdf (application/pdf)
https://www.mdpi.com/1996-1073/13/12/3104/ (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:gam:jeners:v:13:y:2020:i:12:p:3104-:d:372004

Access Statistics for this article

Energies is currently edited by Ms. Agatha Cao

More articles in Energies from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().