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Evidence of the Environmental Kuznets Curve: Unleashing the Opportunity of Industry 4.0 in Emerging Economies

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  • Viktoriia Koilo

    (Hauge School of Management, NLA University College, Linstows gate 3, Oslo 0130, Norway)

Abstract

This study aims to investigate the relationship of economic development, measured as economic growth, energy use, trade and foreign direct investment, on the one hand, and environmental degradation (carbon dioxide (hereafter CO2) emissions), on the other hand, in eleven emerging Eastern European and Central Asian countries during the period of 1990 to 2014. The empirical results give an evidence of a carbon emission Kuznets curve for these emerging economies. The current income level indicates that not every country has reached the turning point for CO2 emissions reductions. Income elasticities for CO2 are positive for all eleven countries. The paper concludes that within the group, Ukraine and Kazakhstan have the most sensitive change in economic growth in respect to CO2. In addition, it concludes that there is a negative effect of total energy consumption on environment as such consumption increases CO2 emissions. The results also show a positive effect of foreign direct investment (FDI) on CO2 emissions in Eastern European and Central Asian countries. It is expected that the innovative transition to a low-carbon economy offers great opportunities for economic growth and job creation. Technological leadership (the initiative Industry 4.0) should be accompanied by the development and introduction of new technologies throughout Eastern European and Central Asian countries, hence, the paradigm of “sustainable development” should be considered as fatal. Furthermore, Eastern European and Central Asian economies should consider the experience of policy making implications made by other developing countries in gaining sustainable growth. Econometric analyses prove the existence of different impact on energy consumption of the ICT sector, which plays a key supporting role for intelligent manufacturing. Thus, there is a need for further investigations of the relationship between technology use and CO2 emissions.

Suggested Citation

  • Viktoriia Koilo, 2019. "Evidence of the Environmental Kuznets Curve: Unleashing the Opportunity of Industry 4.0 in Emerging Economies," JRFM, MDPI, vol. 12(3), pages 1-18, July.
  • Handle: RePEc:gam:jjrfmx:v:12:y:2019:i:3:p:122-:d:250230
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    5. Alan Barrell & Pawel Dobrzanski & Sebastian Bobowski & Krzysztof Siuda & Szymon Chmielowiec, 2021. "Efficiency of Environmental Protection Expenditures in EU Countries," Energies, MDPI, vol. 14(24), pages 1-35, December.
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    7. Tenaw, Dagmawe & Beyene, Abebe D., 2021. "Environmental sustainability and economic development in sub-Saharan Africa: A modified EKC hypothesis," Renewable and Sustainable Energy Reviews, Elsevier, vol. 143(C).
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    10. Quan-Hoang Vuong, 2020. "An Unprecedented Time for Entrepreneurial Finance upon the Arrival of Industry 4.0," JRFM, MDPI, vol. 13(10), pages 1-3, September.
    11. Arindam Das, 2023. "The Relationship between International Trade in Industry 4.0 Products and National-Level Sustainability Performance: An Empirical Investigation," Sustainability, MDPI, vol. 15(2), pages 1-15, January.
    12. Mohammadreza Ramezani & Leili Abolhassani & Naser Shahnoushi Foroushani & Diane Burgess & Milad Aminizadeh, 2022. "Ecological Footprint and Its Determinants in MENA Countries: A Spatial Econometric Approach," Sustainability, MDPI, vol. 14(18), pages 1-20, September.
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    14. Muhammad Shafique & Anam Azam & Muhammad Rafiq & Xiaowei Luo, 2020. "Evaluating the Relationship between Freight Transport, Economic Prosperity, Urbanization, and CO 2 Emissions: Evidence from Hong Kong, Singapore, and South Korea," Sustainability, MDPI, vol. 12(24), pages 1-14, December.
    15. Muntasir Murshed & Uzma Khan & Aarif Mohammad Khan & Ilhan Ozturk, 2023. "Can energy productivity gains harness the carbon dioxide‐inhibiting agenda of the Next 11 countries? Implications for achieving sustainable development," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(1), pages 307-320, February.

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