Internal Validity of Estimating the Carbon Kuznets Curve by Controlling for Energy Use
Juha Itkonen ()
No 95, ifo Working Paper Series from ifo Institute - Leibniz Institute for Economic Research at the University of Munich
The carbon Kuznetz curve (CKC) hypothesis assumes that carbon dioxide emissions initially increase in tandem with output but start decreasing at higher levels of output. This paper considers the internal validity of estimating the CKC in an integrated framework of carbon dioxide emissions, energy consumption, and output, as done in recent literature. We argue that, first, the research question and the feasible conclusions differ from the standard CKC-framework. Second, the estimates are biased to overstate the compatibility of development and environmental policy goals. In a more realistic model carbon dioxide emissions rise quicker, peak later, and decrease slower as output increases.
JEL-codes: O13 Q54 (search for similar items in EconPapers)
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