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The Environmental Kuznets Curve Reconsidered from the Perspective of Heterogeneity: Insights for Climate Change and Energy Policy

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  • Thomas Jobert
  • Fatih Karanfil
  • Anna Tykhonenko

Abstract

Designing an efficient global climate policy turns out to be a difficult yet crucial task since there are noteworthy cross-country differences in energy and carbon intensities. In this paper, the environmental Kuznets curve (EKC) hypothesis is tested for carbon dioxide ( 2 CO ) emissions and the iterative Bayesian shrinkage procedure is employed to handle the crosscountry differences. The results suggest that: first, the EKC hypothesis is rejected for 49 out of the 51 countries considered when the heterogeneity in countries' energy efficiencies and cross-country differences in the 2 CO emissions trajectories are accounted for; second, a classification of the results, with respect to the development levels of the countries concerned, reveals that the emergence of an overall inverted U-shape curve is due to the fact that in the high-income countries, increase in gross domestic product (GDP) decreases emissions, while in the low-income countries emissions and GDP are positively correlated.

Suggested Citation

  • Thomas Jobert & Fatih Karanfil & Anna Tykhonenko, 2012. "The Environmental Kuznets Curve Reconsidered from the Perspective of Heterogeneity: Insights for Climate Change and Energy Policy," GREDEG Working Papers 2012-15, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  • Handle: RePEc:gre:wpaper:2012-15
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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2012-15.pdf
    File Function: First version, 2012
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Azam, Muhammad & Khan, Abdul Qayyum, 2016. "Testing the Environmental Kuznets Curve hypothesis: A comparative empirical study for low, lower middle, upper middle and high income countries," Renewable and Sustainable Energy Reviews, Elsevier, vol. 63(C), pages 556-567.
    2. Roula Inglesi-Lotz & Jessika Bohlmann, 2014. "Environmental Kuznets curve in South Africa: To confirm or not to confirm?," EcoMod2014 6378, EcoMod.

    More about this item

    Keywords

    Environmental Kuznets curve; Bayesian shrinkage estimator; Heterogeneity;

    JEL classification:

    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • 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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