Skip to main content

Advertisement

SpringerLink
Log in

An investigation on the determinants of carbon emissions for OECD countries: empirical evidence from panel models robust to heterogeneity and cross-sectional dependence

  • Research Article
  • Published:
Environmental Science and Pollution Research Aims and scope Submit manuscript

Abstract

This empirical study analyzes the impacts of real income, energy consumption, financial development and trade openness on CO2 emissions for the OECD countries in the Environmental Kuznets Curve (EKC) model by using panel econometric approaches that consider issues of heterogeneity and cross-sectional dependence. Results from the Pesaran CD test, the Pesaran-Yamagata’s homogeneity test, the CADF and the CIPS unit root tests, the LM bootstrap cointegration test, the DSUR estimator, and the Emirmahmutoglu-Kose Granger causality test indicate that (i) the panel time-series data are heterogeneous and cross-sectionally dependent; (ii) CO2 emissions, real income, the quadratic income, energy consumption, financial development and openness are integrated of order one; (iii) the analyzed data are cointegrated; (iv) the EKC hypothesis is validated for the OECD countries; (v) increases in openness and financial development mitigate the level of emissions whereas energy consumption contributes to carbon emissions; (vi) a variety of Granger causal relationship is detected among the analyzed variables; and (vii) empirical results and policy recommendations are accurate and efficient since panel econometric models used in this study account for heterogeneity and cross-sectional dependence in their estimation procedures.

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. http://unfccc.int/resource/docs/2015/cop21/eng/l09r01.pdf (accessed 16 December 2015).

  2. http://unfccc.int/kyoto_protocol/doha_amendment/items/7362.php (accessed 16 December 2015).

References

  • Acaravci A, Ozturk I (2010) On the relationship between energy consumption, CO2 emissions and economic growth in Europe. Energy 35(12):5412–5420

    Article  Google Scholar 

  • 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

    Article  Google Scholar 

  • Alam MJ, Begum IA, Buysse J, Van Huylenbroeck G (2012) Energy consumption, carbon emissions and economic growth nexus in Bangladesh: cointegration and dynamic causality analysis. Energy Policy 45:217–225

    Article  Google Scholar 

  • Al-Mulali U, Weng-Wai C, Sheau-Ting L, Mohammed AH (2015) Investigating the environmental Kuznets curve (EKC) hypothesis by utilizing the ecological footprint as an indicator of environmental degradation. Ecol Indic 48:315–323

    Article  Google Scholar 

  • Alshehry AS, Belloumi M (2015) Energy consumption, carbon dioxide emissions and economic growth: the case of Saudi Arabia. Renew Sust Energ Rev 41:237–247

    Article  Google Scholar 

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

    Article  Google Scholar 

  • Apergis N, Ozturk I (2015) Testing environmental Kuznets curve hypothesis in Asian countries. Ecol Indic 52:16–22

    Article  Google Scholar 

  • Apergis N, Payne JE (2009) CO2 emissions, energy usage, and output in Central America. Energy Policy 37(8):3282–3286

    Article  Google Scholar 

  • Apergis N, Payne JE (2010) The emissions, energy consumption, and growth nexus: evidence from the commonwealth of independent states. Energy Policy 38(1):650–655

    Article  Google Scholar 

  • Atici C (2009) Carbon emissions in central and eastern Europe: environmental Kuznets curve and implications for sustainable development. Sustain Dev 17(3):155–160

    Article  Google Scholar 

  • Baek J (2015) Environmental Kuznets curve for CO2 emissions: the case of Arctic countries. Energy Econ 50:13–17

    Article  Google Scholar 

  • Chandran VGR, Tang CF (2013) The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies. Renew Sust Energ Rev 24:445–453

    Article  Google Scholar 

  • Cho CH, Chu YP, Yang HY (2014) An environment Kuznets curve for GHG emissions: a panel cointegration analysis. Energy Sources Part B Econ Plan Policy 9(2):120–129

    Article  Google Scholar 

  • Cole MA (2004) Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages. Ecol Econ 48(1):71–81

    Article  Google Scholar 

  • Cowan WN, Chang T, Inglesi-Lotz R, Gupta R (2014) The nexus of electricity consumption, economic growth and CO2 emissions in the BRICS countries. Energy Policy 66:359–368

    Article  Google Scholar 

  • De-Vita G, Katircioglu S, Altinay L, Fethi S, Mercan M (2015) Revisiting the environmental Kuznets curve hypothesis in a tourism development context. Environ Sci Pollut Res 22(21):16652–16663

    Article  CAS  Google Scholar 

  • Dogan E (2014) Energy consumption and economic growth: evidence from low-income countries in Sub-Saharan Africa. Int J Energy Econ Policy 4(2):154–162

    Google Scholar 

  • Dogan E, Seker F (2016) The influence of real output, renewable and non-renewable energy, trade and financial development on carbon emissions in the top renewable energy countries. Renew Sust Energ Rev 60:1074–1085

    Article  Google Scholar 

  • Dogan E, Turkekul B (2016) CO2 emissions, real output, energy consumption, trade, urbanization and financial development: testing the EKC hypothesis for the USA. Environ Sci Pollut Res 23(2):1203–1213

    Article  Google Scholar 

  • Dogan E, Seker F, Bulbul S (2015). Investigating the impacts of energy consumption, real GDP, tourism and trade on CO2 emissions by accounting for cross-sectional dependence: a panel study of OECD countries. Curr Issues Tour 1–19

  • Du L, Wei C, Cai S (2012) Economic development and carbon dioxide emissions in China: provincial panel data analysis. China Econ Rev 23(2):371–384

    Article  Google Scholar 

  • Emirmahmutoglu F, Kose N (2011) Testing for Granger causality in heterogeneous mixed panels. Econ Model 28(3):870–876

    Article  Google Scholar 

  • Farhani S, Ozturk I (2015) Causal relationship between CO2 emissions, real GDP, energy consumption, financial development, trade openness, and urbanization in Tunisia. Environ Sci Pollut Res 22(20):15663–15676

    Article  CAS  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 

  • Gokmenoglu K, Taspinar N (2015) The relationship between CO2 emissions, energy consumption, economic growth and FDI: the case of Turkey. J Int Trade Econ Dev 1–18

  • Halicioglu F (2009) An econometric study of CO2 emissions, energy consumption, income and foreign trade in Turkey. Energy Policy 37(3):1156–1164

    Article  Google Scholar 

  • Hossain MS (2011) Panel estimation for CO2 emissions, energy consumption, economic growth, trade openness and urbanization of newly industrialized countries. Energy Policy 39(11):6991–6999

    Article  CAS  Google Scholar 

  • Jalil A, Feridun M (2011) The impact of growth, energy and financial development on the environment in China: a cointegration analysis. Energy Econ 33(2):284–291

    Article  Google Scholar 

  • Jalil A, Mahmud SF (2009) Environment Kuznets curve for CO2 emissions: a cointegration analysis for China. Energy Policy 37(12):5167–5172

    Article  Google Scholar 

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

    Article  Google Scholar 

  • Jayanthakumaran K, Verma R, Liu Y (2012) CO2 emissions, energy consumption, trade and income: a comparative analysis of China and India. Energy Policy 42:450–460

    Article  Google Scholar 

  • 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

    Article  Google Scholar 

  • Kasman A, Duman YS (2015) CO2 emissions, economic growth, energy consumption, trade and urbanization in new EU member and candidate countries: a panel data analysis. Econ Model 44:97–103

    Article  Google Scholar 

  • Katircioglu ST (2014) Testing the tourism-induced EKC hypothesis: the case of Singapore. Econ Model 41:383–391

    Article  Google Scholar 

  • Lau LS, Choong CK, Eng YK (2014) Investigation of the environmental Kuznets curve for carbon emissions in Malaysia: do foreign direct investment and trade matter? Energy Policy 68:490–497

    Article  Google Scholar 

  • Lean HH, Smyth R (2010) CO2 emissions, electricity consumption and output in ASEAN. Appl Energy 87(6):1858–1864

    Article  CAS  Google Scholar 

  • Mark NC, Ogaki M, Sul D (2005) Dynamic seemingly unrelated cointegrating regressions. Rev Econ Stud 72(3):797–820

    Article  Google Scholar 

  • Nasir M, Rehman FU (2011) Environmental Kuznets curve for carbon emissions in Pakistan: an empirical investigation. Energy Policy 39(3):1857–1864

    Article  CAS  Google Scholar 

  • Omri A (2013) CO2 emissions, energy consumption and economic growth nexus in MENA countries: evidence from simultaneous equations models. Energy Econ 40:657–664

    Article  Google Scholar 

  • Ozcan B (2013) The nexus between carbon emissions, energy consumption and economic growth in Middle East countries: a panel data analysis. Energy Policy 62:1138–1147

    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 

  • Pao HT, Tsai CM (2011) Multivariate Granger causality between CO2 emissions, energy consumption, FDI (foreign direct investment) and GDP (gross domestic product): evidence from a panel of BRIC (Brazil, Russian Federation, India, and China) countries. Energy 36(1):685–693

    Article  Google Scholar 

  • Pao HT, Yu HC, Yang YH (2011) Modeling the CO2 emissions, energy use, and economic growth in Russia. Energy 36(8):5094–5100

    Article  Google Scholar 

  • Park J, Hong T (2013) Analysis of South Korea’s economic growth, carbon dioxide emission, and energy consumption using the Markov switching model. Renew Sust Energ Rev 18:543–551

    Article  Google Scholar 

  • Pesaran MH (2004) General diagnostic tests for cross section dependence in panels. Working Papers in Economics No. 0435. University of Cambridge, Cambridge

  • Pesaran MH (2007) A simple panel unit root test in the presence of cross‐section dependence. J Appl Econ 22(2):265–312

    Article  Google Scholar 

  • Pesaran MH, Yamagata T (2008) Testing slope homogeneity in large panels. J Econ 142(1):50–93

    Article  Google Scholar 

  • Phillips P, Sul D (2003) Dynamic panel estimation and homogeneity testing under cross section dependence. Econ J 6(1):217–259

    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 

  • Say NP, Yucel M (2006) Energy consumption and CO2 emissions in Turkey: empirical analysis and future projection based on an economic growth. Energy Policy 34(18):3870–3876

    Article  Google Scholar 

  • Seker F, Ertugrul HM, Cetin M (2015) The impact of foreign direct investment on environmental quality: a bounds testing and causality analysis for Turkey. Renew Sust Energ Rev 52:347–356

    Article  Google Scholar 

  • Shafiei S, Salim RA (2014) Non-renewable and renewable energy consumption and CO2 emissions in OECD countries: a comparative analysis. Energy Policy 66:547–556

    Article  CAS  Google Scholar 

  • Shahbaz M, Solarin SA, Mahmood H, Arouri M (2013) Does financial development reduce CO2 emissions in Malaysian economy? A time series analysis. Econ Model 35:145–152

    Article  Google Scholar 

  • Shahbaz M, Khraief N, Uddin GS, Ozturk I (2014) Environmental Kuznets curve in an open economy: a bounds testing and causality analysis for Tunisia. Renew Sust Energ Rev 34:325–336

    Article  Google Scholar 

  • Shahbaz M, Nasreen S, Abbas F, Anis O (2015) Does foreign direct investment impede environmental quality in high-, middle-, and low-income countries? Energy Econ 51:275–287

    Article  Google Scholar 

  • Soytas U, Sari R, Ewing BT (2007) Energy consumption, income, and carbon emissions in the United States. Ecol Econ 62(3):482–489

    Article  Google Scholar 

  • 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

    Article  Google Scholar 

  • 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 Sust Energ Rev 18:519–527

    Article  Google Scholar 

  • Ucak H, Aslan A, Yucel F, Turgut A (2015) A dynamic analysis of CO2 emissions and the GDP relationship: empirical evidence from high-income OECD countries. Energy Sources Part B Econ Plan Policy 10(1):38–50

    Article  CAS  Google Scholar 

  • Westerlund J, Edgerton DL (2007) A panel bootstrap cointegration test. Econ Lett 97:185–190

    Article  Google Scholar 

  • Yavuz NC (2014) CO2 emission, energy consumption, and economic growth for turkey: evidence from a cointegration test with a structural break. Energy Sources Part B Econ Plan Policy 9(3):229–235

    Article  CAS  Google Scholar 

  • Zaman K, Shahbaz M, Loganathan N, Raza SA (2016) Tourism development, energy consumption and environmental Kuznets curve: trivariate analysis in the panel of developed and developing countries. Tour Manag 54:275–283

    Article  Google Scholar 

  • Zhang L, Gao J (2016) Exploring the effects of international tourism on China’s economic growth, energy consumption and environmental pollution: evidence from a regional panel analysis. Renew Sust Energ Rev 53:225–234

    Article  CAS  Google Scholar 

Download references

Author information

Authors and Affiliations

  1. Department of Economics, Abdullah Gul University, Sumer Campus, Office #B211e, Kayseri, Turkey

    Eyup Dogan

  2. Department of Economics, Bozok University, Yozgat, Turkey

    Fahri Seker

Authors
  1. Eyup Dogan
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Fahri Seker
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Eyup Dogan.

Additional information

Responsible editor: Philippe Garrigues

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Dogan, E., Seker, F. An investigation on the determinants of carbon emissions for OECD countries: empirical evidence from panel models robust to heterogeneity and cross-sectional dependence. Environ Sci Pollut Res 23, 14646–14655 (2016). https://doi.org/10.1007/s11356-016-6632-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s11356-016-6632-2

Keywords

Search

Navigation