CO2 Emissions and Economic Growth: Empirical Analysis of the Environmental Kuznets Curve

Abstract

This research paper investigates the applicability of the Environmental Kuznets Curve (EKC) hypothesis using panel data from 183 countries between 1990 and 2019. The analysis employs a model incorporating a quadratic equation for per capita income. Methodological concerns, including simultaneous bias is addressed. Results support the existence of an EKC for both the full-sample panel and the high-income panel. The estimated tipping points, representing income levels where environmental improvement begins, for the full sample panel aligns with or below previous studies, and those for the high-income panel are higher than earlier estimates. Low- and middle-income countries, EKCs are not established in at least one of the models in each income panel, i.e. CO2 emissions are expected to continue increasing. These results implies that comprehensive strategies are needed that address both economic growth and environmental improvements, especially in low- and middle-income countries.