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The Environmental Kuznets Curve: Implications of Non-Stationarity

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Author Info
Roger Perman () (Department of Economics, University of Strathclyde)
David I. Stern (Centre for Energy and Environmental Studies, Australian National University)

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Abstract

In this paper, we apply time series techniques for panel data to the environmental Kuznets curve (EKC) model. Within the literature that estimates emissions-income relations in the EKC context, little attention has been paid to the time series properties of the data and in particular to whether the variables could be integrated time series. We estimate the EKC for sulphur emissions using a panel data set for 74 countries over 30 years. Using individual unit root tests, we find that both sulphur emissions and GDP per capita are integrated variables in the majority of countries. This result is confirmed by panel unit root tests that find that the panel series are integrated. Individual cointegration tests show that EKC relations in most countries do not cointegrate. Results of a number of panel cointegration statistics are mixed. Even if there is cointegration in the panel many of the individual EKC functions are U shaped or monotonic in income. There is no single cointegrating vector common to all countries. The results show that the EKC may be a problematic concept, as simple global EKC models are misspecified.

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Paper provided by Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program in its series Working Papers in Ecological Economics with number 9901.

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Date of creation: Jun 1999
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Handle: RePEc:anu:wpieep:9901

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lopez Ramon, 1994. "The Environment as a Factor of Production: The Effects of Economic Growth and Trade Liberalization," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 163-184, September. [Downloadable!] (restricted)
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  5. Stern , David I., 1998. "Progress on the environmental Kuznets curve?," Environment and Development Economics, Cambridge University Press, vol. 3(02), pages 173-196, May. [Downloadable!]
  6. Panayotou, Theodore, 1997. "Demystifying the environmental Kuznets curve: turning a black box into a policy tool," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 465-484, November. [Downloadable!]
  7. John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November. [Downloadable!] (restricted)
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  9. Selden Thomas M. & Song Daqing, 1995. "Neoclassical Growth, the J Curve for Abatement, and the Inverted U Curve for Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 162-168, September. [Downloadable!] (restricted)
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  11. David I. Stern & Tony Auld & Michael S. Common & Kali K. Sanyal, 1998. "Is there an environmental Kuznets curve for sulfur?," Working Papers in Ecological Economics 9804, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program. [Downloadable!]
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  12. Gene M. Grossman & Alan B. Krueger, 1991. "Environmental Impacts of a North American Free Trade Agreement," NBER Working Papers 3914, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  13. Quah, Danny, 1994. "Exploiting cross-section variation for unit root inference in dynamic data," Economics Letters, Elsevier, vol. 44(1-2), pages 9-19. [Downloadable!] (restricted)
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  14. P Ekins, 1997. "The Kuznets curve for the environment and economic growth: examining the evidence," Environment and Planning A, Pion Ltd, London, vol. 29(5), pages 805-830, May. [Downloadable!] (restricted)
  15. Beckerman, Wilfred, 1992. "Economic growth and the environment: Whose growth? whose environment?," World Development, Elsevier, vol. 20(4), pages 481-496, April. [Downloadable!] (restricted)
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  18. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September. [Downloadable!] (restricted)
  19. M Pesaran & Yongcheol Shin & Ron P Smith, 2004. "Pooled mean group estimation of dynamic heterogeneous panels," ESE Discussion Papers 16, Edinburgh School of Economics, University of Edinburgh. [Downloadable!]
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(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Marzio Galeotti & Matteo Manera & Alessandro Lanza, 2006. "On the Robustness of Robustness Checks of the Environmental Kuznets Curve," Working Papers 2006.22, Fondazione Eni Enrico Mattei. [Downloadable!]
    Other versions:
  2. Paresh Kumar Narayan & Russell Smyth, . "Are Shocks To Energy Consumption Permanent Or Temporary? Evidence From 182 Countries," Monash Economics Working Papers 2005-06, Monash University, Department of Economics. [Downloadable!]
    Other versions:
  3. Sigrid Stagl, 1999. "Delinking Economic Growth from Environmental Degradation? A Literature Survey on the Environmental Kuznets Curve Hypothesis," Working Papers geewp06, Vienna University of Economics and B.A. Research Group: Growth and Employment in Europe: Sustainability and Competitiveness. [Downloadable!]
  4. Alberto Ansuategi, 2003. "Economic Growth and Transboundary Pollution in Europe: An Empirical Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 305-328, October. [Downloadable!] (restricted)
  5. David E. A. Giles & Carl Mosk, 2003. "Ruminant Eructation and a Long-Run Environmental Kuznets' Curve for Enteric Methane in New Zealand: Conventional and Fuzzy Regression Analysis," Econometrics Working Papers 0306, Department of Economics, University of Victoria. [Downloadable!]
  6. Inmaculada Martínez-Zarzoso & Aurelia Bengochea-Morancho, 2003. "Testing for an environmental Kuznets curve in Latin-American countries," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Economics Department, vol. 18(1), pages 3-26, June. [Downloadable!]
  7. Tom Verbeke & M. De Clercq, 2003. "The income-environment relationship: Does a logit model offer an alternative empirical strategy?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/192, Ghent University, Faculty of Economics and Business Administration. [Downloadable!]
  8. David I. Stern, 1999. "Attributing Changes in Global Sulfur Emissions," Working Papers in Ecological Economics 9902, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program. [Downloadable!]
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