A reexamination of the existence of environmental Kuznets curve for CO2 emissions: evidence from G20 countries

As the main greenhouse gas, carbon dioxide (CO2) has been under intensive studied in the last two decades. This paper addresses the research that whether the environmental Kuznets curve (EKC) for CO2 emissions exists in G20 group—an international forum for governments and central banks from 19 countries and European Union. To analyze the studied relationship thoroughly, other four explanatory variables—two trade openness terms, the ratio of secondary industry value-added to GDP and population density—are employed to investigate whether they have any influences on the existence and shapes of EKC. In the empirical study, two multinational panel data sets covering the periods between 1960 and 2010 (50 years) and between 1990 and 2010 (20 years) are utilized, and the panel data fixed effects and generalized method of moments estimators are employed. The estimation results indicate that the EKC indeed exists in the G20 members as a whole. To investigate whether the existence of EKC depends on the level of economic growth, the G20 countries are further divided into two subgroups: developed and developing countries. Although the estimation results suggest that there exists EKC in developing countries during both 20- and 50-year period, there is no persuasive evidence to prove the existence of EKC in developed countries during the 20-year period. For the time periods we studied, most developed countries have seen relatively stable or even decreasing CO2 emissions, while for the majority of the developing countries, the peak of CO2 emissions could not be reached in the near future.