Is There an Environmental Kuznets Curve for Energy? An Econometric Analysis
AbstractThe Environmental Kuznets Curve (EKC) hypothesis states that pollution levels are increasing as a country develops, but will begin to decrease as rising incomes pass beyond a turning point. EKC analyses test the relationship between a measure of environmental quality and income (usually expressed in a quadratic equation). Other explanatory variables have been included in these models, but income regularly has had the most significant effect on indicators of environmental quality. One variable consistently omitted in these relationships is energy prices. This paper analyzes previous models to illustrate the importance of prices in these models and then includes prices in an econometric EKC framework testing energy/income and CO2/income relationships. These long-run price/income models find that income is no longer the most relevant indicator of environmental quality or energy demand. Indeed, we find no significant evidence for the existence of an EKC within the range of current incomes for energy in the presence of price and trade variables.
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Bibliographic InfoPaper provided by Cornell University, Department of Applied Economics and Management in its series Working Papers with number 127834.
Date of creation: Jul 1997
Date of revision:
Environmental Economics and Policy; Resource /Energy Economics and Policy;
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