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“Environmental degradation, income and economic complexity: Evidence from European countries”

Author

Listed:
  • Oscar Claveria

    (AQR-IREA, University of Barcelona)

  • Petar Soric

    (University of Zagreb)

Abstract

Recent energy tensions caused by conflicts in Ukraine and the Middle East have added to the pressure that global warming exerts for an energy transition towards low-carbon energy sources. This study combines two time series approaches with the aim of delving deeper into the relationship between environmental degradation and economic growth and to test the environmental Kuznets curve (EKC) hypothesis, using information from 20 European countries between 2007 and 2021. Overall, the obtained results suggest the existence of a N-shaped nexus between emissions and income per capita. Additionally, we evaluated stability of this nexus and the potential existence of an asymmetric adjustment. In most countries we find asymmetries in the adjustment of emissions to positive and negative changes in income, but not so much in economic complexity. However, notable differences are observed between countries, which could be indicating their differentiated phase in the EKC curve

Suggested Citation

  • Oscar Claveria & Petar Soric, 2025. "“Environmental degradation, income and economic complexity: Evidence from European countries”," AQR Working Papers 202509, University of Barcelona, Regional Quantitative Analysis Group, revised Nov 2025.
    • Handle: RePEc:aqr:wpaper:202509
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    File URL: https://www.ub.edu/irea/working_papers/2025/202519.pdf
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    References listed on IDEAS

    as
    1. Qiang Wang & Yuanfan Li & Rongrong Li, 2024. "Rethinking the environmental Kuznets curve hypothesis across 214 countries: the impacts of 12 economic, institutional, technological, resource, and social factors," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 11(1), pages 1-19, December.
    2. Panayotou, Theodore, 1997. "Demystifying the environmental Kuznets curve: turning a black box into a policy tool," Environment and Development Economics, Cambridge University Press, vol. 2(4), pages 465-484, November.
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    JEL classification:

    • C38 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Classification Methdos; Cluster Analysis; Principal Components; Factor Analysis
    • C55 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Large Data Sets: Modeling and Analysis
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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