Evaluating the Environmental Phillips Curve Hypothesis in the STIRPAT Framework for Finland

Jani Kinnunen, Irina Georgescu and Ionuț Nica ()
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Jani Kinnunen: Department of Information Systems, Åbo Akademi University, Tuomiokirkontori 3, 20500 Turku, Finland
Ionuț Nica: Department of Economic Informatics and Cybernetics, Bucharest University of Economic Studies, 010552 Bucharest, Romania

Sustainability, 2024, vol. 16, issue 11, 1-24

Abstract: In the context of increasing concerns about environmental sustainability and economic growth, this study evaluates the Environmental Phillips Curve hypothesis within Finland’s STIRPAT framework from 1990 to 2022. Finland is renowned for its commitment to environmental policies and renewable energy innovations, yet it faces challenges in balancing economic growth with environmental protection. The identified problem is the need to understand the trade-offs between economic growth and environmental impact in this specific context. Using the ARDL model, we analyze the effects of GDP per capita, renewable energy consumption (RENC), urbanization (URB), and unemployment rates (UR) on greenhouse gas emissions (GHG). Our findings show that while GDP and urbanization increase GHG emissions, renewable energy significantly reduces them. The Error Correction Model highlights quick adjustments toward equilibrium, reflecting the effectiveness of Finland’s environmental policies. Short-term results confirm the limited impact of urbanization on GHG emissions, possibly due to advanced urban planning. The FMOLS, DOLS, and CCR techniques further support these findings, emphasizing the importance of renewable energy in mitigating environmental impacts. This study provides crucial insights for policymakers seeking to balance economic growth with environmental sustainability in Finland.

Keywords: sustainable development; environmental Phillips curve; Finland; STIRPAT model (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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