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The Environmental Kuznets Curve Under Norden “Green Deal” and Action Plans in Nordic European Countries

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Abstract

This article assesses the path of environmental degradation under the environmental Kuznets curve framework in Nordic European countries using data spanning the period 2005–2019 and employing the ordinary least squares techniques. The findings reveal evidence of a U-shaped structure; meaning, economic growth during the study period under the Norden “Green Deal and Action Plans” impulse remains on a pathway in which environmental quality is not yet improved. Further, there is no leveraging effect that changes the U-shaped structure into and inverted U-shaped. However, Nordic countries are characterized by the existence of the Pollution Halo Effect. Indeed, foreign direct investment inflows lead to increase use of advanced technologies and improved management practices. These results are robust to the use of different techniques such as alternative dependent variables, addition of control variables in response of the likely attrition bias, test of non-belonging to Eurozone features, and quantile analysis. As policy implications, Nordic European countries should amplify environmental management practices and policies to achieve low carbon footprint production or consumption in their economies, as well as pursue on a long-term basis, initiatives for a Green Nordic label, and energy efficiency as settled in the Norden Environmental Action Plan.

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Availability of Data and Materials

The datasets used and analyzed during the current study are available from the corresponding author and could be shared on reasonable request. Economic Complexity Index can be found in the Atlas OEC database accessible from: https://oec.world/en/rankings/eci/hs6/hs96?tab=table.

Notes

  1. This Nordic community also involves the Faroe Islands, Greenland, and Aland.

  2. Other references are Cole and Neumayer (2004), Stern (2004), Shafik and Bandyopadhyay (1992), Stern (1998), Chen (2016), and Panayotou et al. (2000).

  3. Dasgupta et al. (2002), John and Pecchenino (1994), John et al. (1995), Selden and Song (1994), Cole (2007), Galeotti et al. (2006), Panayotou (1997)

  4. Particularly in the literature that deals with European countries: Data and De (2021), Ma et al. (2021), Xu et al. (2020), Ali et al. (2020), Alsayed and Kun Sek (2013) for renewable energy; Jozwik et al. (2021), Topolewski (2021), Dogan et al., (2020), Balcilar et al. (2020), Li et al. (2020), Destek et al. (2016), Bozkurt and Okumus (2019), Al Mulali et al. (2015), Figuero and Pastén (2009), and Suri and Chapman (1998), Richmond and Kaufmann (2006a, b), Shahbaz et al. (2017), Ansari et al. (2020), Altıntas and Kassouri (2020), and Chen (2016) for non-renewable energy.

  5. Environmental impact (I), population (P), affluence (A), and technology (T).

  6. Dinda (2004), Bimonte and Stabile (2017).

  7. Austria, Belgium, Canada, Denmark, Finland, France, Germany, Italy, Japan, The Netherlands, New Zealand, Norway, Portugal, Spain, Sweden, Switzerland, the UK, USA, and Uruguay.

  8. Denmark, Iceland, Norway, and Sweden (non-Eurozone Nordic country members) and Finland (Eurozone Nordic country member).

  9. Koenker (2005), Kocherginsky et al. (2005), and Tarr (2010) have tested different sizes of observations that could be used with quantile estimation method.

  10. Tchapchet-Tchouto et al. (2022).

  11. See Andersson (2019), Lin and Li (2011).

Abbreviations

AMG:

Augmented Mean Group

CO2:

Carbon Dioxide

COP26:

26Th United Nations (UN) Climate Change Conference of the Parties

DOLS:

Dynamics Ordinary Least Squares

ECI:

Economic Complexity Index

EcoFP:

Ecological Footprint

EKC:

Environmental Kuznets Curve

EURC:

Euro Currency

FDI:

Foreign Direct Investment

FMOLS:

Fully Modified Ordinary Least Squares

GDP:

Gross Domestic Product

GHG:

Greenhouse Gases

GNI:

Gross National Income

GNIpc:

Gross National Income per Capita

GNISQ:

Gross National Income Square

IEA:

International Energy Agency

IPAT:

Impact, Population, Affluence, Technology

NEURC:

Non-Euro Currency

OEC:

The Observatory of Economic Complexity

OECD:

Organisation for Economic Co-operation and Development

OPEC:

Organization in Petroleum Exporting Countries

PHE:

Pollution Halo Effect

UN :

United Nations

WDI:

World Development Indicators

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The authors are indebted to the editor and anonymous referees for their valuable comments that have enabled to improve the quality of this article. The usual disclaimer applies.

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Authors and Affiliations

  1. Public Economics Department, Faculty of Economics and Management, University of Dschang, Dschang, Cameroon

    Jules-Eric Tchapchet-Tchouto

  2. Center for Studies and Research in Economies and Management (CERME), University of Dschang, Dschang, Cameroun

    Jules-Eric Tchapchet-Tchouto, Rosy Pascale Meyet Tchouapi, Arsene Mouongue Kelly & Isaac Ketu

  3. UFR Droit, Sciences Economiques et de Gestion, University of Rouen Normandy, Rouen, France

    Gérard Duthil

  4. Laboratoire d’Economie Rouen Normandie, University of Rouen, Rouen, France

    Gérard Duthil

  5. Department of Development Economics, Faculty of Economics and Management, University of Dschang, Dschang, Cameroon

    Rosy Pascale Meyet Tchouapi

  6. Dschang School of Economics and Management, LAREFA, University of Dschang, Dschang, Cameroon

    Arsene Mouongue Kelly & Isaac Ketu

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Tchapchet-Tchouto, JE., Duthil, G., Meyet Tchouapi, R. et al. The Environmental Kuznets Curve Under Norden “Green Deal” and Action Plans in Nordic European Countries. J Knowl Econ (2024). https://doi.org/10.1007/s13132-024-01744-z

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