Greenhouse gas emissions: is there an environmental Kuznets curve in South Asia?

We examine the environmental Kuznets curve (EKC) relationship in South Asia focusing on the emissions of major greenhouse gases (GHGs) namely CO2 (carbon dioxide), CH4 (methane), and N2O (nitrous oxide). We exploit a balanced annual panel dataset for five South Asian countries covering the period 1971–2018, and use the OLS estimation technique with country- and year-fixed effects, and country-specific time trends to begin with. The OLS results show that the income-CO2 emission relationship is positive while the income-CH4 and income-N2O emission relationships follow the EKC or inverted-U pattern. Analyses with a sub-sample, 4-year average data, and considering the cross-sectional dependence support the findings. The panel threshold regression and the nonparametric and semiparametric estimation techniques also support the monotonic positive effect of income on CO2 emissions but indicate non-linearity in the relationship such that emissions rates are higher at higher income. However, the results from these latter estimation techniques weaken the observed EKC patterns regarding CH4 and N2O emissions. So, according to this study, the existence of the GHG–EKC relationships in South Asia is questionable. We suggest that to reduce GHG emissions, South Asian countries should focus on cleaner technology and take coordinated policy actions that should involve all the stakeholders.