Springer Nature is making Coronavirus research free. View research | View latest news | Sign up for updates

The impact of economic complexity on carbon emissions: evidence from France

Abstract

This paper reanalyzes the determinants of the CO2 emissions in France. For this purpose, it considers the unit root test with two structural breaks and a dynamic ordinary least squares estimation. The paper also considers the effects of the energy consumption and the economic complexity on CO2 emissions. First, it is observed that the EKC hypothesis is valid in France. Second, the positive effect of the energy consumption on CO2 emissions is obtained. Third, it is observed that a higher economic complexity suppresses the level of CO2 emissions in the long run. The findings imply noteworthy environmental policy implications to decrease the level of CO2 emissions in France.

This is a preview of subscription content, log in to check access.

Fig. 1

Notes

  1. 1.

    According to the World Bank data, Qatar is the richest country with $139,174 GDP per capita in 2014. However, its economic complexity ranking is 60th in the world within the same year.

  2. 2.

    In addition, there are also studies to analyze the EKC hypothesis with including France in the panel datasets for the Organization for the Economic Cooperation and Development (OECD) and the European Union (EU) countries (See Al-Mulali and Ozturk 2016; Bilgili et al. 2016; Jebli et al. 2016).

  3. 3.

    For a recent literature review of the EKC hypothesis, See Al-Mulali and Ozturk (2016).

  4. 4.

    For an exceptional approach, e.g., See Bento and Moutinho (2016).

  5. 5.

    For instance, capital formation (Zhang and Cheng 2009), export diversification (Gozgor and Can 2016), export quality (Gozgor and Can 2017), financial development (Javid and Sharif 2016), foreign direct investment (FDI) (Tang and Tan 2015), population density (Onafowora and Owoye 2014), trade openness (Onafowora and Owoye 2014), and urbanization (Zhang and Cheng 2009) are used as an additional control variable to analyze the validity of the EKC hypothesis in developing countries.

  6. 6.

    According to the Atlas of Economic Complexity, France is the 13th complex economy in the world in 2014.

  7. 7.

    In some cases, taking the natural logarithm of the ECI can be problematic. In the French case, economic complexity values are always positive (i.e., the ECI values of France are always above the world’s average for the period from 1964 to 2014). However, economic complexity values can be negative in the low-income and some developing economies; and in such a case, one cannot take the natural logarithm of the negative ECI values.

  8. 8.

    We would like to thank an anonymous reviewer for pointing out this issue.

  9. 9.

    It is important to indicate that the reference year should probably be the last observation of the empirical examination since one should pay regard to the ECI values of all products in the previous years.

  10. 10.

    See Can and Dogan (2017) for details of the ECI and the product space theory.

  11. 11.

    We refer to the original papers for the details of the unit root test and the DOLS estimation techniques. We did not provide the equations for test procedures to save space.

  12. 12.

    Note that 106.7% = 100 ∗ (e 0.726 – 1).

References

  1. Ajmi AN, Hammoudeh S, Nguyen DK, Sato JR (2015) On the relationships between CO2 emissions, energy consumption and income: the importance of time variation. Energy Econ 49:629–638

  2. Al-Mulali U, Ozturk I (2016) The investigation of environmental Kuznets curve hypothesis in the advanced economies: the role of energy prices. Renew Sust Energ Rev 54:1622–1631

  3. Ang JB (2007) CO2 emissions, energy consumption, and output in France. Energy Policy 35(10):4772–4778

  4. Bento JPC, Moutinho V (2016) CO2 emissions, non-renewable and renewable electricity production, economic growth and international trade in Italy. Renew Sust Energ Rev 55:142–155

  5. Bilgili F, Kocak E, Bulut U (2016) The dynamic impact of renewable energy consumption on CO2 emissions: a revisited environmental Kuznets curve approach. Renew Sust Energ Rev 54:838–845

  6. Can M, Dogan B (2017) The effects of economic structural transformation on employment: an evaluation in the context of economic complexity and product space theory. In: Yenilmez F, Kilic E (eds) Handbook of research on unemployment and labor market sustainability in the era of globalization. Hershey, IGI Global Publishing, pp 275–306

  7. Colombelli A, Krafft J, Quatraro F (2014) The emergence of new technology-based sectors in European regions: a proximity-based analysis of nanotechnology. Res Policy 43(10):1681–1696

  8. Dinda S (2004) Environmental Kuznets curve hypothesis: a survey. Ecol Econ 49(4):431–455

  9. Gozgor G, Can M (2016) Export product diversification and the environmental Kuznets curve: evidence from Turkey. Environ Sci Pollut Res 23(21):21594–21603

  10. Gozgor G, Can M (2017) Does export product quality matter for CO2 emissions? Evidence from China. Environ Sci Pollut Res 24(3):2866–2875

  11. Hausmann R, Hidalgo CA, Bustos S, Coscia M, Chung S, Jimenez J, Simoes A, Yildirim M (2011) The Atlas of economic complexity. Puritan Press, Cambridge

  12. Hidalgo, C.A. (2009). The dynamics of economic complexity and the product space over a 42 year period. Harvard University Center for International Development Working Paper, No.189.

  13. Hidalgo CA (2011) Discovering southern and east Africa's industrial opportunities. The German Marshall Fund of the United States, Economic Paper Series, Washington, D.C.

  14. Hidalgo CA, Hausmann R (2009) The building of economic complexity. Proceedings of the National Academy of Sciences of the United States of America (PNAS) 106(26):10570–10575

  15. Hidalgo CA, Klinger B, Barabasi AL, Hausmann R (2007) The product space conditions the development of nations. Science 317(5837):482–487

  16. Iwata H, Okada K, Samreth S (2010) Empirical study on the environmental Kuznets curve for CO2 in France: the role of nuclear energy. Energy Policy 38(8):4057–4063

  17. Javid M, Sharif F (2016) Environmental Kuznets curve and financial development in Pakistan. Renew Sust Energ Rev 54:406–414

  18. Jebli MB, Youssef SB, Ozturk I (2016) Testing environmental Kuznets curve hypothesis: the role of renewable and non-renewable energy consumption and trade in OECD countries. Ecol Indic 60:824–831

  19. Kearsley A, Riddel M (2010) A further inquiry into the pollution haven hypothesis and the environmental Kuznets curve. Ecol Econ 69(4):905–919

  20. Minondo A, Requena-Silvente F (2013) Does complexity explain the structure of trade? Can J Econ 46(3):928–955

  21. Mohnen P, Hall BH (2013) Innovation and productivity: an update. Eurasian Business Review 3(1):47–65

  22. Narayan PK, Popp S (2010) A new unit root test with two structural breaks in level and slope at unknown time. J Appl Stat 37(9):1425–1438

  23. Onafowora OA, Owoye O (2014) Bound testing approach to analysis of the environment Kuznets curve hypothesis. Energy Econ 44:47–62

  24. Stock J, Watson MW (1993) A simple estimator of cointegrating vectors in higher order integrated systems. Econometrica 61(4):783–820

  25. Sweet CM, Maggio DSE (2015) Do stronger intellectual property rights increase innovation? World Dev 66:665–677

  26. Tang CF, Tan BW (2015) The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam. Energy 79:447–454

  27. Yin J, Zheng M, Chen J (2015) The effects of environmental regulation and technical progress on CO2 Kuznets curve: an evidence from China. Energy Policy 77:97–108

  28. Zhang X-P, Cheng X-M (2009) Energy consumption, carbon emission, and economic growth in China. Ecol Econ 68(10):2706–2712

Download references

Acknowledgements

We would like to express our gratitude to the editor and two anonymous referees for their valuable comments, which significantly improved the paper.

Author information

Correspondence to Giray Gozgor.

Additional information

Responsible editor: Philippe Garrigues

Appendix

Appendix

Rights and permissions

Reprints and Permissions

About this article

Verify currency and authenticity via CrossMark

Cite this article

Can, M., Gozgor, G. The impact of economic complexity on carbon emissions: evidence from France. Environ Sci Pollut Res 24, 16364–16370 (2017). https://doi.org/10.1007/s11356-017-9219-7

Download citation

Keywords

  • Environmental degradation
  • CO2 emissions
  • Economic complexity
  • Time series modeling
  • France

JEL classification

  • Q56
  • Q55
  • O13
  • C32