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CO2 Kuznets Curve Revisited: From Cross-Sections to Panel Data Models

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  • Atwi, Majed

    (Universidad de Zaragoza)

  • Barberán, Ramón

    (Universidad de Zaragoza)

  • Mur, Jesús

    (Universidad de Zaragoza)

  • Angulo, Ana

    (Universidad de Zaragoza)

Abstract

The Environmental Kuznets Curve (EKC) predicts that environmental degradation intensifies when per capita income increases and subsequently subsides after a certain income level is reached, resulting in an inverted U-shaped relationship. There is abundant literature on the topic that corroborates the existence of a positive income elasticity for environmental quality. However, results are controversial. We take the case of CO2, by comparing the results of the cross-sectional estimates with those derived from a panel approach. To this end, we use data from 182 countries during the period 1992-2011. We found that the EKC hypothesis is acceptable under both approaches, although the estimated turning points in cross-sections seem unreliable. Our application underlines the importance of adequately address central problems such as heterogeneity, structural breaks and spatial interaction.

Suggested Citation

  • Atwi, Majed & Barberán, Ramón & Mur, Jesús & Angulo, Ana, 2018. "CO2 Kuznets Curve Revisited: From Cross-Sections to Panel Data Models," INVESTIGACIONES REGIONALES - Journal of REGIONAL RESEARCH, Asociación Española de Ciencia Regional, issue 40, pages 169-196.
  • Handle: RePEc:ris:invreg:0369
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    Keywords

    Kuznets environmental curve; CO2 emissions; spatial effects; structural breaks; heterogeneity;
    All these keywords.

    JEL classification:

    • L83 - Industrial Organization - - Industry Studies: Services - - - Sports; Gambling; Restaurants; Recreation; Tourism
    • Q25 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Water

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