Skip to main content

Advertisement

SpringerLink
Log in

Role of energy in estimating turning point of Environmental Kuznets Curve: an econometric analysis of the existing studies

  • Review Article
  • Published:
Journal of Social and Economic Development Aims and scope Submit manuscript

Abstract

The objective of the present study is to examine the role of energy-related variables while estimating the turning points of the assessed inverted U-shape relationship between economic growth and environmental quality, popularly known as Environmental Kuznets Curve (EKC). We conduct a systematic review the of existing studies concerning EKC hypothesis and apply Tobit model for 235 observations to examine the role of energy on turning points reported in the existing studies after controlling other study-specific characteristics. Our analysis shows that studies where energy variable is included to estimate EKC, the turning point is recorded higher as compared to the studies where it is not. Among other study-specific features, income level of the sample countries, econometric specification, type of data set and environmental indicator used are found to have a significant impact on the turning points. However, there is no significant impact of trade-related variables and population on the estimated turning points.

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

Access this article

Log in via an institution

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. There are studies which have estimated EKC for several environmental indicators or different data sets in the same study. In such cases each environmental indicator, sub sample of nations, data set has been considered as an individual observation. Due to this, number of observations has surpassed the number of studies. Initially we took 90 studies with 250 observations. Since we have included monotonic relationship, we got very high turning points for some studies that are deleted as outliers and thus we were left with only 235 observations with 75 studies.

References

  • Agras J, Chapman D (1999) A dynamic approach to the Environmental Kuznets Curve hypothesis. Ecol Econ 28:267–277

    Article  Google Scholar 

  • Andreoni J, Levinson A (2001) The simple analytics of the Environmental Kuznets Curve. J Public Econ 80:269–286

    Article  Google Scholar 

  • Arai Y, Kurozumi E (2007) Testing for the null hypothesis of cointegration with a structural break. Econom Rev 26:705–739

    Article  Google Scholar 

  • Arrow K, Bolin B, Costanza R, Dasgupta P, Folke C, Holling CS, Jansson B, Levin S, Maler KG, Perrings C, Pimental D (1995) Economic growth, carrying capacity, and the environment. Ecol Econ 15:91–95

    Article  Google Scholar 

  • Auci S, Becchetti L (2006) The instability of the adjusted and unadjusted environmental Kuznets curves. Ecol Econ 60(1):282–298

    Article  Google Scholar 

  • Baldwin R (1995) Does sustainability require growth? In: Goldin I, Winters LA (eds) The economics of sustainable development. Cambridge University Press, Cambridge, pp 19–47

    Google Scholar 

  • Barbier EB (2001) The economics of tropical deforestation and land use: an introduction to the spacial use. Land Econ 77:155–171

    Article  Google Scholar 

  • Bhattarai M, Hammig M (2001) Institution and the EKC for deforestation: a cross country analysis for Latin America, Africa and Asia. World Dev 29:995–1010

    Article  Google Scholar 

  • Bohara A, Gawande K, Berrens R, Wang P (1999) Environmental Kuznets Curve(s) for U.S. Hazardous waste sites: theory and evidence. Department of Economics, Manuscript, University of Mexico

  • Brock W, Taylor M (2010) The green Solow model. J Econ Growth 15:127–153

    Article  Google Scholar 

  • Caviglia-Harris JL, Chambers D, Kahn JR (2009) Taking the ‘U’ out of Kuznets—a comprehensive analysis of the EKC and environmental degradation. Ecol Econ 68:1149–1159

    Article  Google Scholar 

  • Cavlovic TA, Baker KH, Berrens RP, Gawande K (2000) A meta-analysis of Environmental Kuznets Curve studies. Agric Resour Econ Rev 29(1):32–42

    Article  Google Scholar 

  • Chen J, Huang Y (2013) The study of the relationship between carbon dioxide (CO2) emission and economic growth. J Int Glob Econ Stud 34:45–61

    Google Scholar 

  • Clement M, Meunie A (2010) Is inequality harmful for the environment? An empirical analysis applied to developing and transition countries. Rev Soc Econ 68:413–445

    Article  Google Scholar 

  • Cole MA (1999) Limits to growth, sustainable development and Environmental Kuznets Curves: an examination of the environmental impact of economic development. Sustain Dev 7:87–97

    Article  Google Scholar 

  • Cole MA (2004) Trade, the pollution haven hypothesis and the Environmental Kuznets Curve: examining the linkages. Ecol Econ 48:71–81

    Article  Google Scholar 

  • Cole MA, Rayner J, Bates JM (1997) The Environmental Kuznets Curve: an empirical analysis. Environ Dev Econ 2:401–416

    Article  Google Scholar 

  • Coondoo D, Dinda S (2002) Causality between income and emission: a country group-specific econometric analysis. Ecol Econ 40:351–367

    Article  Google Scholar 

  • Culas RJ (2012) REDD and forest transition: tunneling through the Environmental Kuznets Curve. Ecol Econ 79:44–51

    Article  Google Scholar 

  • Dasgupta S, Laplante B, Wang H, Wheeler D (2002) Confronting the Environmental Kuznets Curve. J Econ Perspect 16:147–168

    Article  Google Scholar 

  • De Bruyn SM, van den Bergh JCJM, Opschoor JB (1998) Economic growth and emissions: reconsidering the empirical basis of Environmental Kuznets Curves. Ecol Econ 25:161–175

    Article  Google Scholar 

  • Deacon RT, Norman CS (2014) Does the Environmental Kuznets Curve describe how individual countries behave ? Land Econ 82:291–315

    Article  Google Scholar 

  • Diao XD, Zeng SX, Tam CM, Tam VW (2009) EKC analysis for studying economic growth and environmental quality: a case study in China. J Clean Prod 17(5):541–548

    Article  Google Scholar 

  • Dijkgraaf E, Vollebergh HRJ (2005) A test for parameter homogeneity in CO2 panel EKC estimations. Environ Resource Econ 32:229–239

    Article  Google Scholar 

  • Dinda S (2004) Environmental Kuznets Curve hypothesis: a survey. Ecol Econ 49:431–455

    Article  Google Scholar 

  • Dinda S, Coondoo D (2006) Income and emission: a panel data-based cointegration analysis. Ecol Econ 57:167–181

    Article  Google Scholar 

  • Dinda S, Coondoo D, Pal M (2000) Air quality and economic growth: an empirical study. Ecol Econ 34:409–423

    Article  Google Scholar 

  • Duarte R, Pinilla V, Serrano A (2013) Is there an Environmental Kuznets Curve for water use? A panel smooth transition regression approach. Econ Model 31:518–527

    Article  Google Scholar 

  • Ehrlich PR, Holdren JP (1971) Impact of population growth. Science 171(3977):1212–17

    Article  Google Scholar 

  • Eskeland G, Harrison A (2003) Moving to Greener pastures? Multinationals and the pollution haven hypothesis. J Dev Econ 70:1–23

    Article  Google Scholar 

  • Esteve V, Tamarit C (2012a) Threshold cointegration and nonlinear adjustment between CO2 and income: the Environmental Kuznets Curve in Spain, 1857–2007. Energy Econ 34(6):2148–2156

    Article  Google Scholar 

  • Esteve V, Tamarit C (2012b) Is there an Environmental Kuznets Curve for Spain? Fresh evidence from old data. Econ Model 29(6):2696–2703

    Article  Google Scholar 

  • Farhani S, Chaibi A, Rault C (2014) CO2 emissions, output, energy consumption, and trade in Tunisia. Econ Model 38:426–434

    Article  Google Scholar 

  • Friedl B, Getzner M (2003) Determinants of CO2 emissions in a small open economy. Ecol Econ 45(1):133–148

    Article  Google Scholar 

  • Gawande K, Berrens RP, Bohara AK (2001) A consumption-based theory of the environmental Kuznets curve. Ecol Econ 37(1):101–112

    Article  Google Scholar 

  • Giovanis E (2013) Environmental Kuznets Curve: evidence from the British household panel survey. Econ Model 30:602–611

    Article  Google Scholar 

  • Grossman GM, Krueger AB (1991) Environmental impacts of a North American free trade agreement. National Bureau of Economic Research working paper series no. 3914, pp 1–57. http://www.nber.org/papers/w3914. Retrieved on 22 Mar 2014

  • Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110:353–377

    Article  Google Scholar 

  • Holtz-eakin D, Selden TM (1995) Stoking the fires. CO2 emissions and economic growth. J Public Econ 57:85–101

    Article  Google Scholar 

  • Jalil A, Mahmud SF (2009) Environment Kuznets curve for CO2 emissions: a cointegration analysis for China. Energy Policy 37:5167–5172

    Article  Google Scholar 

  • Jebli MB, Youssef SB, Ozturk I (2015) Testing environmental Kuznets curve hypothesis: the role of renewable and non-renewable energy consumption and trade in OECD countries. Ecol Ind 60:824–831

    Article  Google Scholar 

  • Jha R, Murthy KVB (2003) An inverse global Environmental Kuznets Curve. J Comp Econ 31:352–368

    Article  Google Scholar 

  • Kahuthu A (2006) Economic growth and environmental degradation in a global context. Environ Dev Sustain 8:55–68

    Article  Google Scholar 

  • Katz D (2015) Water use and economic growth: reconsidering the Environmental Kuznets Curve relationship. J Clean Prod 88:205–213

    Article  Google Scholar 

  • Kejriwal M (2008) Cointegration with structural breaks: an application to the Feldstein–Horioka puzzle. Stud Nonlinear Dyn Econom 12(1):1–37

    Google Scholar 

  • Koop G, Tole L (1999) Is There an Environmental Kuznets Curve for deforestation? J Dev Econ 58(1):231–244

    Article  Google Scholar 

  • Lee CC, Lee JD (2009) Income and CO2 emissions: evidence from panel unit root and cointegration tests. Energy Policy 37(2):413–423

    Article  Google Scholar 

  • Lee CC, Chiu YB, Sun CH (2010) The Environmental Kuznets Curve hypothesis for water pollution: do regions matter? Energy Policy 38(1):12–23

    Article  Google Scholar 

  • Lindmark M (2002) An EKC-pattern in historical perspective: carbon dioxide emissions, technology, fuel prices and growth in Sweden 1870–1997. Ecol Econ 42:333–347

    Article  Google Scholar 

  • List J, Gallet C (1999) The Environmental Kuznets Curve: does one size fit all? Ecol Econ 31:409–423

    Article  Google Scholar 

  • Liu X, Heilig GK, Chen J, Heino M (2007) Interactions between economic growth and environmental quality in Shenzhen, China’s first special economic zone. Ecol Econ 62(3):559–570

    Article  Google Scholar 

  • Luzzati T, Orsini M (2009) Investigating the energy-Environmental Kuznets Curve. Energy 34(3):291–300

    Article  Google Scholar 

  • Marquart-Pyatt S (2004) A cross-national investigation of deforestation, debt, state fiscal capacity, and the Environmental Kuznets Curve. Int J Sociol 34(1):33–51

    Google Scholar 

  • Martínez-Zarzoso I, Bengochea-Morancho A (2004) Pooled mean group estimation of an Environmental Kuznets Curve for CO2. Econ Lett 82(1):121–126

    Article  Google Scholar 

  • Mather AS, Needle CL, Fairbairn J (1999) Environmental Kuznets Curves and forest trends. Geography 84:55–65

    Google Scholar 

  • McConnell KE (1997) Income and the demand for environmental quality. Environ Dev Econ 2(4):383–399

    Article  Google Scholar 

  • Merlevede B, Verbeke T, De Clercq M (2006) The EKC for SO2: does firm size matter? Ecol Econ 59(4):451–461

    Article  Google Scholar 

  • Millimet DL, List JA, Stengos T (2003) The Environmental Kuznets Curve: real progress or misspecified models? Rev Econ Stat 85:1038–1047

    Article  Google Scholar 

  • Munasinghe M (1999) Is environmental degradation an inevitable consequence of economic growth: tunneling through the Environmental Kuznets Curve. Ecol Econ 29:89–109

    Article  Google Scholar 

  • Onater-Isberk E (2016) Environmental Kuznets Curve under noncarbohydrate energy. Renew Sustain Energy Rev 64:338–347

    Article  Google Scholar 

  • Orubu CO, Omotor DG (2011) Environmental quality and economic growth: searching for Environmental Kuznets Curves for air and water pollutants in Africa. Energy Policy 39(7):4178–4188

    Article  Google Scholar 

  • Ozturk I, Acaravci A (2013) The long-run and causal analysis of energy, growth, openness and financial development on carbon emissions in Turkey. Energy Econ 36:262–267

    Article  Google Scholar 

  • Panayotou T (1997) Demystifying the Environmental Kuznets Curve: turning a black box into a policy tool. Environ Dev Econ 2(4):465–484

    Article  Google Scholar 

  • Pao HT, Tsai CM (2010) CO2 emissions, energy consumption and economic growth in BRIC countries. Energy Policy 38:7850–7860

    Article  Google Scholar 

  • Perman R, Stern DI (2013) Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist. Aust J Agric Resour Econ 47:325–347

    Article  Google Scholar 

  • Pezzey JCV (1989) Economic analysis of sustainable growth and sustainable development. Environment Department working paper 15. World Bank

  • Prieur F (2009) The Environmental Kuznets Curve in a world of irreversibility. Econ Theory 40:57–90

    Article  Google Scholar 

  • Roca J (2003) Do individual preferences explain Environmental Kuznets Curve? Ecol Econ 45:3–10

    Article  Google Scholar 

  • Rothman DS (1998) Environmental Kuznets Curves—real progress or passing the buck? A case for consumption-based approaches. Ecol Econ 25:177–194

    Article  Google Scholar 

  • Saboori B, Sulaiman J, Mohd S (2012) Economic growth and CO2 emissions in Malaysia: a cointegration analysis of the Environmental Kuznets Curve. Energy Policy 51:184–191

    Article  Google Scholar 

  • Selden T, Song D (1994) Environmental quality and development: is there a Kuznets curve for air pollution emissions? J Environ Econ Manag 27(2):147–162

    Article  Google Scholar 

  • Shafik N (1994) Economic development and environmental quality: an econometric analysis. Oxford Economic papers new series, vol 46, Special Issue on Environmental Economics, pp 757–773

  • Shafik N, Bandyopadhyay S (1992) Economic growth and environmental quality time-series and cross-country evidence. Policy Research working paper no. 904, The World Bank

  • Shahbaz M, Lean HH, Shabbir MS (2012) Environmental Kuznets Curve hypothesis in Pakistan: cointegration and granger causality. Renew Sustain Energy Rev 16:2947–2953

    Article  Google Scholar 

  • Shahbaz M, Mutascu M, Azim P (2013) Environmental Kuznets Curve in romania and the role of energy consumption. Renew Sustain Energy Rev 18:165–173

    Article  Google Scholar 

  • Shahbaz M, Mallick H, Mahalik MK, Loganathan N (2015) Does globalization impede environmental quality in India? Ecol Indic 52:379–393

    Article  Google Scholar 

  • Shen J (2006) A simultaneous estimation of Environmental Kuznets Curve: evidence from China. China Econ Rev 17:383–394

    Article  Google Scholar 

  • Sinha A, Bhattacharya J (2016) Environmental Kuznets Curve estimation for NO2 emission: a case of Indian cities. Ecol Ind 67:1–11

    Article  Google Scholar 

  • Song T, Zheng T, Tong L (2008) An empirical test of the Environmental Kuznets Curve in China: a panel cointegration approach. China Econ Rev 19(3):381–392

    Article  Google Scholar 

  • Stern DI (1998) Progress on the environmental Kuznets curve? Environ Dev Econ 3:175–198

    Article  Google Scholar 

  • Stern DI (2002) Explaining changes in global sulfur emissions: an econometric decomposition approach. Ecol Econ 42:201–220

    Article  Google Scholar 

  • Stern DI (2004) The rise and fall of the Environmental Kuznets Curve. World Dev 32:1419–1439

    Article  Google Scholar 

  • Stern DI (2010) Between estimates of the emissions income elasticity. Ecol Econ 69:2173–2182

    Article  Google Scholar 

  • Stern DI, Common MS (2001) Is there an Environmental Kuznets Curve for sulfur? J Environ Econ Manag 41:162–178

    Article  Google Scholar 

  • Stern DI, Common MS, Barbier EB (1996) Economic growth and environmental degradation: the Environmental Kuznets Curve and sustainable development. World Dev 24:1151–1160

    Article  Google Scholar 

  • Stokey NL (1998) Are there limits to growth? Int Econ Rev 39:1–31

    Article  Google Scholar 

  • Suri V, Chapman D (1998) Economic growth, trade and energy: implications for the Environmental Kuznets Curve. Ecol Econ 25(2):195–208

    Article  Google Scholar 

  • Syed A, Grafton RQ, Kalirajan K, Parham D (2015) Multifactor productivity growth and the Australian mining sector. Aust J Agric Res Econ 59(4):549–570

    Article  Google Scholar 

  • Taguchi H (2012) The Environmental Kuznets Curve in Asia: the case of sulphur and carbon emissions. Asia Pac Dev J 19:77–92

    Article  Google Scholar 

  • Taguchi H, Yoshida T (2010) Environment Pollution Control: Advantage or Disadvantage for Latecomer’s Economies in East Asia? (No. 23079). East Asian Bureau of Economic Research

  • Tiwari AK, Shahbaz M, Hye QMA (2013) The Environmental Kuznets Curve and the role of coal consumption in India: cointegration and causality analysis in an open economy. Renew Sustain Energy Rev 18:519–527

    Article  Google Scholar 

  • Torras M, Boyce JK (1998) Income, inequality, and pollution: a reassessment of the Environmental Kuznets Curve. Ecol Econ 25:147–160

    Article  Google Scholar 

  • Tucker M (1995) Carbon dioxide emissions and global GDP. Ecol Econ 15(3):215–223

    Article  Google Scholar 

  • Vukina T, Beghin JC, Solakoglu EG (1999) Transition to markets and the environment: effects of the change in the composition of manufacturing output. Environ Dev Econ 4:582–598

    Article  Google Scholar 

  • Wang H, Yanhong J (2007) Industrial ownership and environmental performance: evidence from China. Environ Resource Econ 36(3):255–273

    Article  Google Scholar 

  • Wang SX, Fu YB, Zhang ZG (2015) Population growth and the Environmental Kuznets Curve. China Econ Rev 36:146–165

    Article  Google Scholar 

  • Xing Y, Kolstad CD (2002) Do lax environmental regulations attract foreign investment? Environ Resource Econ 21(1):1–22

    Article  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Humanities and Social Sciences, Indian Institute of Technology Madras, Chennai, 600036, India

    Sabuj Kumar Mandal & Devleena Chakravarty

Authors
  1. Sabuj Kumar Mandal
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Devleena Chakravarty
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Sabuj Kumar Mandal.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Mandal, S.K., Chakravarty, D. Role of energy in estimating turning point of Environmental Kuznets Curve: an econometric analysis of the existing studies. J. Soc. Econ. Dev. 19, 387–401 (2017). https://doi.org/10.1007/s40847-018-0048-4

Download citation

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s40847-018-0048-4

Keywords

JEL Classification

Search

Navigation