Environmental degradation, income and economic complexity: Evidence from European countries

Oscar Claveria and Petar Soric
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Petar Soric: University of Zagreb

No 202509, AQR Working Papers from University of Barcelona, Regional Quantitative Analysis Group

Abstract: Recent energy tensions caused by conflicts in Ukraine and the Middle East have added to the pressure that global warming exerts for an energy transition towards low-carbon energy sources. This study combines two time series approaches with the aim of delving deeper into the relationship between environmental degradation and economic growth and to test the environmental Kuznets curve (EKC) hypothesis, using information from 20 European countries between 2007 and 2021. Overall, the obtained results suggest the existence of a N-shaped nexus between emissions and income per capita. Additionally, we evaluated stability of this nexus and the potential existence of an asymmetric adjustment. In most countries we find asymmetries in the adjustment of emissions to positive and negative changes in income, but not so much in economic complexity. However, notable differences are observed between countries, which could be indicating their differentiated phase in the EKC curve

Keywords: economic growth; economic complexity; environmental degradation; greenhouse gas emissions; Europe JEL classification: C38; C55; O44; Q20; Q50 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2025-11, Revised 2025-11
New Economics Papers: this item is included in nep-cis, nep-eec, nep-ene, nep-env, nep-eur, nep-res and nep-tra
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Persistent link: https://EconPapers.repec.org/RePEc:aqr:wpaper:202509

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