Estimating country-specific environmental Kuznets curves from panel data: a Bayesian shrinkage approach

Thomas Jobert (), Fatih Karanfil () and Anna Tykhonenko ()
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Thomas Jobert: GREDEG - Groupe de Recherche en Droit, Economie et Gestion - UNS - Université Nice Sophia Antipolis (1965 - 2019) - CNRS - Centre National de la Recherche Scientifique - UniCA - Université Côte d'Azur
Fatih Karanfil: EconomiX - EconomiX - UPN - Université Paris Nanterre - CNRS - Centre National de la Recherche Scientifique

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Abstract: Designing an efficient global climate policy turns out to be a difficult yet crucial task since there are noteworthy cross-country differences in energy and carbon intensities. In this article, the environmental Kuznets curve (EKC) hypothesis is tested for carbon dioxide (CO2) emissions, and as a modelling technique, the iterative Bayesian shrinkage procedure is employed to handle the cross-country differences. The results suggest that first the EKC hypothesis is rejected for 47 out of the 51 countries considered when the heterogeneity in countries' energy efficiencies and cross-country differences in the CO2 emissions trajectories are accounted for; second, a classification of the results with respect to the development levels of the countries concerned reveals that the emergence of an overall inverted U-shaped curve is due to the fact that in high-income countries increase in gross domestic product (GDP) decreases emissions, while in low-income countries emissions and GDP are positively correlated.

Keywords: heterogeneity; environmental Kuznets curve; Bayesian shrinkage estimator (search for similar items in EconPapers)
Date: 2014-01-01
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Citations: View citations in EconPapers (9)

Published in Applied Economics, 2014, 46 (13), pp.1449-1464. ⟨10.1080/00036846.2013.875111⟩

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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:halshs-01053358

DOI: 10.1080/00036846.2013.875111

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