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Modelling the nonlinear relationship between CO2 emissions from oil and economic growth

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  • Wang, Kuan-Min

Abstract

The purpose of this paper is to examine the relationship between carbon dioxide (CO2) emissions from oil and GDP, using panel data from 1971 to 2007 of 98 countries. Previous studies have discussed the environmental Kuznets curve (EKC) hypothesis, but little attention has been paid to the existence of a nonlinear relationship between these two variables. We argue that there exists a threshold effect between the two variables: different levels of economic growth bear different impacts on oil CO2 emissions. Our empirical results do not support the EKC hypothesis. Additionally, the results of short-term analyses of static and dynamic panel threshold estimations suggest the efficacy of a double-threshold (three-regime) model. In the low economic growth regime, economic growth negatively affects oil CO2 emissions growth; in the medium economic growth regime, however, economic growth positively impacts oil CO2 emissions growth; and in the high economic growth regime, the impact of economic growth is insignificant.

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Bibliographic Info

Article provided by Elsevier in its journal Economic Modelling.

Volume (Year): 29 (2012)
Issue (Month): 5 ()
Pages: 1537-1547

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Handle: RePEc:eee:ecmode:v:29:y:2012:i:5:p:1537-1547

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Web page: http://www.elsevier.com/locate/inca/30411

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Keywords: Carbon dioxide emissions from oil; Economic growth; Environmental Kuznets curve; Dynamic panel threshold model;

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Cited by:
  1. Al-mulali, Usama & Foon Tang, Chor, 2013. "Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries," Energy Policy, Elsevier, vol. 60(C), pages 813-819.
  2. Chandran, V.G.R. & Tang, Chor Foon, 2013. "The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 445-453.
  3. Md. Al Mamun & Kazi Sohag & Md. Abdul Hannan Mia & Gazi Salah Uddin & Ilhan Ozturk, 2014. "Regional Differences in the Dynamic Linkage between CO2 Emissions, Sectoral Output and Economic Growth," Working Papers 2014-141, Department of Research, Ipag Business School.
  4. Van Hoa, Tran & Limskul, Kitti, 2013. "Economic impact of CO2 emissions on Thailand's growth and climate change mitigation policy: A modelling analysis," Economic Modelling, Elsevier, vol. 33(C), pages 651-658.

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