Re-estimating the interconnectedness between the demand of energy consumption, income, and sustainability indices

Ozcan, Burcu; Tzeremes, Panayiotis; Dogan, Eyup

doi:10.1007/s11356-019-05767-x

Research Article
Published: 10 July 2019

Re-estimating the interconnectedness between the demand of energy consumption, income, and sustainability indices

Environmental Science and Pollution Research volume 26, pages 26500–26516 (2019)Cite this article

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Abstract

In this study, we analyze the time-varying causality linkages between energy consumption, economic growth, and environmental degradation in 33 Organization for Economic Co-operation and Development countries, spanning the period 2000 to 2013. The curve causality approach provides evidence of a significant environmental Kuznets curve in 25 countries in the case of the ecological footprint and in 23 countries in the case of the Environmental Performance Index. However, out of them, only Italy, Slovakia, and South Korea have traditional environmental Kuznets curve, in the form of an inverted U–shaped curve. For the remaining countries, different forms of curves are valid. In particular, an N-shaped curve appears to be valid between income and environmental degradation for nearly half of the sample, i.e., for Austria, Belgium, Chile, Estonia, Finland, France, Germany, Hungary, Luxembourg, Netherlands, Sweden, Switzerland, New Zealand, Turkey, and the USA. Additionally, bidirectional causality relationships are confirmed among all covariates in most countries. In view of the results, some crucial policy implications would be suggested, such as sustainable development that aims to make a balance between economic growth and environmental protection.

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Notes

See https://www.unostamps.nl/subject_united_nations_conference_human_environment.htm
The study proposed by Kraft and Kraft (1978) is based on a bivariate model that includes only energy consumption and economic growth. However, recent studies have analyzed the energy consumption and economic growth issue by adding more variables into model to prevent omitted variable problem.
There are four hypotheses in this research field: growth hypothesis assumes a unidirectional causality running from energy consumption to economic growth; the conservation hypothesis implies a one-way causality running from economic growth to energy consumption; the feedback hypothesis indicates a bidirectional causality between energy consumption and economic growth; and finally, the neutrality hypothesis doesn’t postulate any significant causality between energy consumption and economic growth.
See https://data.worldbank.org/indicator/eg.use.comm.fo.zs
For more details about SI, please see Bohringer and Jochem (2007).
Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Israel, Italy, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Slovakia, Slovenia, South Korea, Spain, Sweden, Switzerland, Turkey, United Kingdom (UK) and United States of America (USA)
The data can be downloaded from: http://archive.epi.yale.edu/
The data can be downloaded from: https://data.footprintnetwork.org/#/
The data can be downloaded from: https://datacatalog.worldbank.org/
Many authors have employed the quadratic match-sum model (see, inter alia, Borjigin et al. 2018; Shahbaz et al. 2017; Shahbaz et al. 2018).
The software R (https://www.r-project.org/) is applied to carry out all statistical analyses.
See https://issuu.com/yaleepi/docs/2014_epi_report
https://insights.globalspec.com/article/7751/air-quality-top-public-health-threat-2018-environmental-performance-index
M- and B-splines functions are nominated by Eilers and Marx (1996).
Australia, Austria, Belgium, Canada, Chile, Czech Republic, Denmark, Finland, France, Germany, Hungary, Japan, Luxembourg, Mexico, New Zealand, Slovakia, South Korea, Spain, Turkey, and USA
See https://www.climatechangepost.com/italy/energy/
See http://www.helsinkitimes.fi/finland/finland-news/domestic/14913-finns-have-one-of-the-biggest-carbon-footprints-in-eu.html
See https://yle.fi/uutiset/osasto/news/wwf_finland_leaves_hefty_ecological_footprint/5217078
Seehttps://www.washingtonpost.com/graphics/world/ecologicalfootprint/?noredirect=on&utm_term=.b986769e1eaa
See https://www.enercee.net/countries/country-selection/slovak-republic/latest-news/detail/?pager%5Bpage%5D=1&tx_ttnews%5Btt_news%5D=998
An N-shaped relationship between economic growth and environmental degradation in the case of the EF is same with an inverted N-shaped relationship in the case of the EPI.
See http://data.footprintnetwork.org/#/
See http://www.yeu-international.org/en/publications/newsmail/between-the-lines/eu-countries-are-ones-with-highest-ecological-footprints-what-can-be-the-solution
The second threshold per capita income level beyond which environmental pollution restarts arising

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Faculty of Economics and Administrative Sciences, Department of Economics, Firat University, 23200, Elazig, Turkey
Burcu Ozcan
Laboratory of Economic Policy and Strategic Planning, Department of Economics, University of Thessaly, 28th October 78, 38333, Volos, Greece
Panayiotis Tzeremes
Faculty of Managerial Sciences, Business Administration, Abdullah Gul University, 38280, Kayseri, Turkey
Eyup Dogan

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Burcu Ozcan
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Panayiotis Tzeremes
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Eyup Dogan
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Ozcan, B., Tzeremes, P. & Dogan, E. Re-estimating the interconnectedness between the demand of energy consumption, income, and sustainability indices. Environ Sci Pollut Res 26, 26500–26516 (2019). https://doi.org/10.1007/s11356-019-05767-x

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Received: 20 May 2019
Accepted: 17 June 2019
Published: 10 July 2019
Issue Date: 01 September 2019
DOI: https://doi.org/10.1007/s11356-019-05767-x

Keywords

Environmental Kuznets curve
Energy consumption
Sustainability indices
Economic growth
Time-varying causality