CO2 Kuznets Curve Revisited: From Cross-Sections to Panel Data Models

Majed Atwi, Ramón Barberán, Jesus Mur and Ana Angulo
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Majed Atwi: Universidad de Zaragoza
Ramón Barberán: Universidad de Zaragoza

INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, 2018, issue 40, 169-196

Abstract: The Environmental Kuznets Curve (EKC) predicts that environmental degradation intensifies when per capita income increases and subsequently subsides after a certain income level is reached, resulting in an inverted U-shaped relationship. There is abundant literature on the topic that corroborates the existence of a positive income elasticity for environmental quality. However, results are controversial. We take the case of CO2, by comparing the results of the cross-sectional estimates with those derived from a panel approach. To this end, we use data from 182 countries during the period 1992-2011. We found that the EKC hypothesis is acceptable under both approaches, although the estimated turning points in cross-sections seem unreliable. Our application underlines the importance of adequately address central problems such as heterogeneity, structural breaks and spatial interaction.

Keywords: Kuznets environmental curve; CO2 emissions; spatial effects; structural breaks; heterogeneity (search for similar items in EconPapers)
JEL-codes: L83 Q25 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:ris:invreg:0369

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