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Internal Validity of Estimating the Carbon Kuznets Curve by Controlling for Energy Use

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Abstract

The carbon Kuznetz curve (CKC) hypothesis assumes that carbon dioxide emissions initially increase in tandem with output but start decreasing at higher levels of output. This paper considers the internal validity of estimating the CKC in an integrated framework of carbon dioxide emissions, energy consumption, and output, as done in recent literature. We argue that, first, the research question and the feasible conclusions differ from the standard CKC-framework. Second, the estimates are biased to overstate the compatibility of development and environmental policy goals. In a more realistic model carbon dioxide emissions rise quicker, peak later, and decrease slower as output increases.

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  • Juha Itkonen, 2010. "Internal Validity of Estimating the Carbon Kuznets Curve by Controlling for Energy Use," ifo Working Paper Series 95, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    • Handle: RePEc:ces:ifowps:_95
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    References listed on IDEAS

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    Cited by:

    1. Touitou Mohammed, 2021. "Empirical Analysis of the Environmental Kuznets Curve for Economic Growth and CO2 Emissions in North African Countries," Econometrics. Advances in Applied Data Analysis, Sciendo, vol. 25(2), pages 67-77, June.
    2. Cristina Ruza & Raquel Caro-Carretero, 2022. "The Non-Linear Impact of Financial Development on Environmental Quality and Sustainability: Evidence from G7 Countries," IJERPH, MDPI, vol. 19(14), pages 1-21, July.

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    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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