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Economic growth and environmental degradation: evidence from the US case environmental Kuznets curve hypothesis with application of decomposition

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  • Serdar Ongan
  • Cem Isik
  • Dilek Ozdemir

Abstract

This study re-tests the environmetal Kuznets curve (EKC) hypothesis for the US, based on a methodology that differentiates this study from previous empirical studies.To this aim, the per-capita income series (variable) is decomposed into its increases and decreases as two new time series and only one series, which contains income increases, is used. The rationale of this decomposition method is that the EKC hypothesis is originally postulated based on the impacts of income increases on environmental degradation. Therefore, this decomposition may allow us to test the EKC hypothesis more accurately through only income increases in accordance with its original postulation. Following decomposition, the ARDL approach to cointegration is applied between 1990M1 and 2019M7. Empirical findings of decomposed and undecomposed models are exactly opposite to each other. While the undecomposed model does not detect evidence of the EKC hypothesis for the US, the decomposed model strongly does so. This can lead to the interpretation that the decomposed model discovers-detects the existing but concealed validity of the EKC hypothesis, which the undecomposed model is not capable of detecting. Based on this result, this study proposes using this method as well, as an alternative technique for the EKC hypothesis testing models.

Suggested Citation

  • Serdar Ongan & Cem Isik & Dilek Ozdemir, 2021. "Economic growth and environmental degradation: evidence from the US case environmental Kuznets curve hypothesis with application of decomposition," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 10(1), pages 14-21, January.
    • Handle: RePEc:taf:teepxx:v:10:y:2021:i:1:p:14-21
    DOI: 10.1080/21606544.2020.1756419
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    Citations

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    Cited by:

    1. Cem Ișik & Munir Ahmad & Uğur Korkut Pata & Serdar Ongan & Magdalena Radulescu & Festus Fatai Adedoyin & Engin Bayraktaroğlu & Sezi Aydın & Ayse Ongan, 2020. "An Evaluation of the Tourism-Induced Environmental Kuznets Curve (T-EKC) Hypothesis: Evidence from G7 Countries," Sustainability, MDPI, vol. 12(21), pages 1-11, November.
    2. Chinazaekpere Nwani, 2021. "Taking Venezuela back to the sustainability path: The role of financial development and economic integration in low‐carbon transition," Natural Resources Forum, Blackwell Publishing, vol. 45(1), pages 37-62, February.
    3. Ar'anzazu de Juan & Pilar Poncela & Vladimir Rodr'iguez-Caballero & Esther Ruiz, 2022. "Economic activity and climate change," Papers 2206.03187, arXiv.org, revised Jun 2022.
    4. Shobande, Olatunji A. & Asongu, Simplice A., 2022. "The Critical Role of Education and ICT in Promoting Environmental Sustainability in Eastern and Southern Africa: A Panel VAR Approach," Technological Forecasting and Social Change, Elsevier, vol. 176(C).
    5. Tan, Xiujie & Liu, Yishuang & Dong, Hanmin & Zhang, Zhan, 2022. "The effect of carbon emission trading scheme on energy efficiency: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 506-517.
    6. Donato Morea & Lucilla Bittucci & Arturo Cafaro & Fabiomassimo Mango & Pina Murè, 2021. "Can the Current State Support Mechanisms Help the Growth of Renewable Energies in Wind Markets?," Sustainability, MDPI, vol. 13(21), pages 1-17, November.
    7. Taner Akan & Halil İbrahim Gündüz & Tara Vanlı & Ahmet Baran Zeren & Ali Haydar Işık & Tamerlan Mashadihasanli, 2023. "Why are some countries cleaner than others? New evidence from macroeconomic governance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6167-6223, July.
    8. Nyiko Worship Hlongwane & Olebogeng David Daw, 2022. "Testing Environmental Kuznets Curve Hold in South Africa: An Econometric Approach," International Journal of Energy Economics and Policy, Econjournals, vol. 12(3), pages 385-394, May.
    9. Olatunji A. Shobande & Simplice A. Asongu, 2021. "The rise and fall of the energy-carbon Kuznets curve: Evidence from Africa," Research Africa Network Working Papers 21/069, Research Africa Network (RAN).
    10. Li, Tianyu & Umar, Muhammad & Mirza, Nawazish & Yue, Xiao-Guang, 2023. "Green financing and resources utilization: A story of N-11 economies in the climate change era," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1174-1184.
    11. Chi-Hui Wang & Prasad Padmanabhan & Chia-Hsing Huang, 2021. "The Impact of Renewable Energy, Urbanization, and Environmental Sustainability Ratings on the Environmental Kuznets Curve and the Pollution Haven Hypothesis," Sustainability, MDPI, vol. 13(24), pages 1-22, December.
    12. Razzaq, Asif & Sharif, Arshian & Ozturk, Ilhan & Afshan, Sahar, 2023. "Dynamic and threshold effects of energy transition and environmental governance on green growth in COP26 framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 179(C).
    13. Koç, Pınar & Gülmez, Ahmet, 2021. "Analysis of relationships between nanotechnology applications, mineral saving and ecological footprint: Evidence from panel fourier cointegration and causality tests," Resources Policy, Elsevier, vol. 74(C).
    14. Daiva Makutėnienė & Algirdas Justinas Staugaitis & Valdemaras Makutėnas & Dalia Juočiūnienė & Yuriy Bilan, 2022. "An Empirical Investigation into Greenhouse Gas Emissions and Agricultural Economic Performance in Baltic Countries: A Non-Linear Framework," Agriculture, MDPI, vol. 12(9), pages 1-22, August.

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