The Environmental Kuznets Curve Reconsidered from the Perspective of Heterogeneity: Insights for Climate Change and Energy Policy
AbstractDesigning an efficient global climate policy turns out to be a difficult yet crucial task since there are noteworthy cross-country differences in energy and carbon intensities. In this paper, the environmental Kuznets curve (EKC) hypothesis is tested for carbon dioxide ( 2 CO ) emissions and the iterative Bayesian shrinkage procedure is employed to handle the crosscountry differences. The results suggest that: first, the EKC hypothesis is rejected for 49 out of the 51 countries considered when the heterogeneity in countries' energy efficiencies and cross-country differences in the 2 CO emissions trajectories are accounted for; second, a classification of the results, with respect to the development levels of the countries concerned, reveals that the emergence of an overall inverted U-shape curve is due to the fact that in the high-income countries, increase in gross domestic product (GDP) decreases emissions, while in the low-income countries emissions and GDP are positively correlated.
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Bibliographic InfoPaper provided by Groupe de REcherche en Droit, Économie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis in its series GREDEG Working Papers with number 2012-15.
Length: 36 pages
Date of creation: Nov 2012
Date of revision:
Environmental Kuznets curve; Bayesian shrinkage estimator; Heterogeneity;
Find related papers by JEL classification:
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- O44 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
- Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
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