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Is There an Environmental Kuznets Curve for Energy? An Econometric Analysis

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  • Agras, Jean
  • Chapman, Duane

Abstract

The Environmental Kuznets Curve (EKC) hypothesis states that pollution levels are increasing as a country develops, but will begin to decrease as rising incomes pass beyond a turning point. EKC analyses test the relationship between a measure of environmental quality and income (usually expressed in a quadratic equation). Other explanatory variables have been included in these models, but income regularly has had the most significant effect on indicators of environmental quality. One variable consistently omitted in these relationships is energy prices. This paper analyzes previous models to illustrate the importance of prices in these models and then includes prices in an econometric EKC framework testing energy/income and CO2/income relationships. These long-run price/income models find that income is no longer the most relevant indicator of environmental quality or energy demand. Indeed, we find no significant evidence for the existence of an EKC within the range of current incomes for energy in the presence of price and trade variables.

Suggested Citation

  • Agras, Jean & Chapman, Duane, 1997. "Is There an Environmental Kuznets Curve for Energy? An Econometric Analysis," Working Papers 127834, Cornell University, Department of Applied Economics and Management.
  • Handle: RePEc:ags:cudawp:127834
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    File URL: http://purl.umn.edu/127834
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    References listed on IDEAS

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    1. Holtz-Eakin, Douglas & Selden, Thomas M., 1995. "Stoking the fires? CO2 emissions and economic growth," Journal of Public Economics, Elsevier, vol. 57(1), pages 85-101, May.
    2. Arrow, Kenneth & Bolin, Bert & Costanza, Robert & Dasgupta, Partha & Folke, Carl & Holling, C.S. & Jansson, Bengt-Owe & Levin, Simon & Mäler, Karl-Göran & Perrings, Charles & Pimentel, David, 1996. "Economic growth, carrying capacity, and the environment," Environment and Development Economics, Cambridge University Press, vol. 1(01), pages 104-110, February.
    3. Robert Summers & Alan Heston, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950–1988," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 327-368.
    4. Tucker, Michael, 1995. "Carbon dioxide emissions and global GDP," Ecological Economics, Elsevier, vol. 15(3), pages 215-223, December.
    5. Costanza, Robert, 1995. "Economic growth, carrying capacity, and the environment," Ecological Economics, Elsevier, vol. 15(2), pages 89-90, November.
    6. Gene M. Grossman & Alan B. Krueger, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, Oxford University Press, vol. 110(2), pages 353-377.
    7. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
    8. J. M. Reilly & J. A. Edmonds & R. H. Gardner & A. L. Brenkerf, 1987. "Uncertainty Analysis of the IEA/ORAU CO2 Emissions Model," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 1-29.
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    Cited by:

    1. Kaika, Dimitra & Zervas, Efthimios, 2013. "The Environmental Kuznets Curve (EKC) theory—Part A: Concept, causes and the CO2 emissions case," Energy Policy, Elsevier, vol. 62(C), pages 1392-1402.
    2. repec:taf:jenpmg:v:59:y:2016:i:11:p:1933-1956 is not listed on IDEAS

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