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Is There an Environmental Kuznets Curve for Energy? An Econometric Analysis

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  • Agras, Jean
  • Chapman, Duane

Abstract

The 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.

Suggested Citation

  • Agras, Jean & Chapman, Duane, 1997. "Is There an Environmental Kuznets Curve for Energy? An Econometric Analysis," Working Papers 127834, Cornell University, Department of Applied Economics and Management.
    • Handle: RePEc:ags:cudawp:127834
    DOI: 10.22004/ag.econ.127834
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    Cited by:

    1. Elvis Dze Achuo, 2022. "The nexus between crude oil price shocks and environmental quality: empirical evidence from sub-Saharan Africa," SN Business & Economics, Springer, vol. 2(7), pages 1-15, July.
    2. Kaika, Dimitra & Zervas, Efthimios, 2013. "The Environmental Kuznets Curve (EKC) theory—Part A: Concept, causes and the CO2 emissions case," Energy Policy, Elsevier, vol. 62(C), pages 1392-1402.
    3. Maamar Sebri, 2016. "Testing the environmental Kuznets curve hypothesis for water footprint indicator: a cross-sectional study," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 59(11), pages 1933-1956, November.
    4. Tetsuya Tsurumi & Shunsuke Managi, 2010. "Decomposition of the environmental Kuznets curve: scale, technique, and composition effects," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 11(1), pages 19-36, February.

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