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Modelling the nonlinear relationship between CO2 emissions from oil and economic growth

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  • Wang, Kuan-Min

Abstract

The purpose of this paper is to examine the relationship between carbon dioxide (CO2) emissions from oil and GDP, using panel data from 1971 to 2007 of 98 countries. Previous studies have discussed the environmental Kuznets curve (EKC) hypothesis, but little attention has been paid to the existence of a nonlinear relationship between these two variables. We argue that there exists a threshold effect between the two variables: different levels of economic growth bear different impacts on oil CO2 emissions. Our empirical results do not support the EKC hypothesis. Additionally, the results of short-term analyses of static and dynamic panel threshold estimations suggest the efficacy of a double-threshold (three-regime) model. In the low economic growth regime, economic growth negatively affects oil CO2 emissions growth; in the medium economic growth regime, however, economic growth positively impacts oil CO2 emissions growth; and in the high economic growth regime, the impact of economic growth is insignificant.

Suggested Citation

  • Wang, Kuan-Min, 2012. "Modelling the nonlinear relationship between CO2 emissions from oil and economic growth," Economic Modelling, Elsevier, vol. 29(5), pages 1537-1547.
  • Handle: RePEc:eee:ecmode:v:29:y:2012:i:5:p:1537-1547
    DOI: 10.1016/j.econmod.2012.05.001
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    1. Bosupeng, Mpho, 2015. "Drivers of Global Carbon Dioxide Emissions: International Evidence," MPRA Paper 77925, University Library of Munich, Germany, revised 2015.
    2. Elena Stolyarova, 2013. "Carbon Dioxide Emissions, economic growth and energy mix: empirical evidence from 93 countries," Post-Print hal-01639531, HAL.
    3. Raheem Ibrahim Dolapo & Kazeem O. Isah, 2015. "Modelling the nonlinear relationship between co2 emissions and energy consumption: new evidence on the role of economic growth," ECONOMICS AND POLICY OF ENERGY AND THE ENVIRONMENT, FrancoAngeli Editore, vol. 2015(1), pages 59-70.
    4. Elena Stolyarova, 2013. "Carbon Dioxide Emissions, economic growth and energy mix: empirical evidence from 93 countries," EcoMod2013 5433, EcoMod.
    5. Cansino, José M. & Sánchez-Braza, Antonio & Rodríguez-Arévalo, María L., 2015. "Driving forces of Spain׳s CO2 emissions: A LMDI decomposition approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 749-759.
    6. Kefan Wang & Bangzhu Zhu & Ping Wang & Yi-Ming Wei, 2016. "Examining the links among economic growth, energy consumption, and CO2 emission with linear and nonlinear causality tests," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 81(2), pages 1147-1159, March.
    7. Van Hoa, Tran & Limskul, Kitti, 2013. "Economic impact of CO2 emissions on Thailand's growth and climate change mitigation policy: A modelling analysis," Economic Modelling, Elsevier, vol. 33(C), pages 651-658.
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    10. Al-mulali, Usama & Foon Tang, Chor, 2013. "Investigating the validity of pollution haven hypothesis in the gulf cooperation council (GCC) countries," Energy Policy, Elsevier, vol. 60(C), pages 813-819.
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    13. Chandran, V.G.R. & Tang, Chor Foon, 2013. "The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 445-453.
    14. Al Mamun, Md. & Sohag, Kazi & Hannan Mia, Md. Abdul & Salah Uddin, Gazi & Ozturk, Ilhan, 2014. "Regional differences in the dynamic linkage between CO2 emissions, sectoral output and economic growth," Renewable and Sustainable Energy Reviews, Elsevier, vol. 38(C), pages 1-11.
    15. Narayan, Paresh Kumar & Saboori, Behnaz & Soleymani, Abdorreza, 2016. "Economic growth and carbon emissions," Economic Modelling, Elsevier, vol. 53(C), pages 388-397.
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    17. Furuoka, Fumitaka, 2015. "The CO2 emissions–development nexus revisited," Renewable and Sustainable Energy Reviews, Elsevier, vol. 51(C), pages 1256-1275.
    18. Tang, Chor Foon & Tan, Bee Wah, 2015. "The impact of energy consumption, income and foreign direct investment on carbon dioxide emissions in Vietnam," Energy, Elsevier, vol. 79(C), pages 447-454.

    More about this item

    Keywords

    Carbon dioxide emissions from oil; Economic growth; Environmental Kuznets curve; Dynamic panel threshold model;

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • 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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