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Does the Environmental Kuznets Curve for CO 2 Emissions Exist for Rwanda? Evidence from Bootstrapped Rolling-Window Granger Causality Test

Author

Listed:
  • Felix Nutakor

    (School of Business, Qingdao University, Qingdao 266071, China)

  • Sylvestre Bizumuremyi

    (School of Business, Qingdao University, Qingdao 266071, China)

  • Jinke Li

    (School of Business, Qingdao University, Qingdao 266071, China)

  • Wei Liu

    (School of Business, Qingdao University, Qingdao 266071, China)

Abstract

This paper examined the causal relationship between economic growth and carbon dioxide emissions (CO 2 ) in Rwanda using annual data from 1960–2014. The study was conducted within the framework of the environmental Kuznets curve (EKC) hypothesis using the rolling-window bootstrap Granger causality test approach with a rolling-window size of 15 years. The methodology allows for non-constancy in the parameters of the vector autoregression (VAR) model in the short run as well as in the long run. The study found bi-direction causality between the real gross domestic product (GDP) and CO 2 emissions in metric tons per capita. The results from the rolling-window bootstrap Granger causality test show that GDP negatively influenced CO 2 emissions in the 1976–1977, 1990–1993, 2005–2006, and 2007–2013 sub-sample periods. This result depicts a monotonically decreasing EKC, contrary to the standard EKC relationship. The downward-sloping EKC was explained by the transition of the Rwandan economy from an industrial-based economy to a service-based economy. Further, a feedback effect from CO 2 emissions to the economy was established.

Suggested Citation

  • Felix Nutakor & Sylvestre Bizumuremyi & Jinke Li & Wei Liu, 2020. "Does the Environmental Kuznets Curve for CO 2 Emissions Exist for Rwanda? Evidence from Bootstrapped Rolling-Window Granger Causality Test," Sustainability, MDPI, vol. 12(20), pages 1-11, October.
    • Handle: RePEc:gam:jsusta:v:12:y:2020:i:20:p:8636-:d:430922
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