Questioning the empirical basis of the environmental Kuznets curve for CO2: New evidence from a panel stationarity test robust to multiple breaks and cross-dependence

This paper investigates the time series properties of per capita CO₂ emissions and per capita GDP levels for a sample of 86 countries over the period 1960-2000. For that purpose, we employ a state-of-the-art panel stationarity test which incorporates multiple shifts in level and slope, thereby controlling for cross-sectional dependence through bootstrap methods. Our analysis renders clear-cut evidence that per capita GDP levels are nonstationary for the world as a whole while per capita CO₂ is found to be regime-wise trend stationary. The analysis of country-groups shows that for Africa and Asia, per capita CO₂ is best described as nonstationary, while per capita GDP appears stationary around a broken trend. In addition, we find evidence of regime-wise trend stationarity in both variables for the country-groups consisting of America, Europe and Oceania. The results of our analysis carry important implications for the statistical modelling of the Environmental Kuznets curve for CO₂, since the differing order of integration in both variables for the world as a whole and for Africa and Asia calls into question the validity of panel cointegration techniques which assume that both variables are nonstationary and cointegrated with one another. Cointegration techniques would not be appropriate either for the case of America, Europe and Oceania which are characterised by per capita GDP and CO₂ emissions being stationary around a broken trend. Similar conclusions are reached when we analyse country-groups based on levels of development. Failure to properly characterise the time series properties of the data by not controlling for an unknown number of structural breaks and for cross-sectional dependence could be responsible for the fragility and lack of robustness surrounding the estimation of environmental Kuznets curves.     

我国居民消费波动的影响因素研究

基于VAR模型的脉冲响应函数和方差分解技术对我国居民人均消费的影响因素进行实证分析,发现我国居民人均收入增长对人均消费增长贡献最大,固定资产投资增长和人均储蓄存款增长对我国居民人均消费增长率也有比较大的贡献。格兰杰因果检验证实了这一结论。我国固定资产投资增长与居民人均收入增长存在双向的格兰杰因果关系;同时人均消费增长也对我国居民人均收入增长有着微弱的影响。     

中国经济增长与环境污染——基于时序数据的经验分析(1985～2003)

本文选用1985￣2003年期间我国的六类环境污染指标,从时序维度考察了环境污染与我国人均收入变化之间的长期均衡关系和相互作用机制。首先,基于MaddalaandKim提出的改进的Johansen协整检验结果表明,在具有协整关系的四类变量中,只有二氧化硫排放总量与人均GDP之间存在正的协整关系,其他三类污染指标(工业废水排放量、工业烟尘排放量、工业固体废弃物排放量)与人均GDP之间协整关系均为负,这表明发展中国家的经济增长并不必然导致环境的恶化;其次,分别基于误差修正模型的因果关系检验与TodaandYamamoto提出的Granger因果检验方法考察了六类污染指标与人均GDP之间的双向因果关系,研究发现环境污染与我国人均GDP之间的一般规律:人均GDP是导致污染排放量变化的重要原因,但污染排放并不是导致人均GDP变化的原因。     

Does S. Kuznets's belief question the Environmental Kuznets Curves?

Abstract.  This paper examines the link between pollution and income. The main purpose is to assess whether the introduction of income inequality in a Environmental Kuznets Curve (EKC) analysis can give new insights into the relationship between pollution and economic growth. The EKC hypothesis proposes that there is an inverted U‐shape relation between environmental degradation and income per capita. We question this common result, in a simple model where the income inequality evolution is exogenous and where the planner could use only one instrument. For a set of parameter values we find, for example, a two‐hump curve. JEL classification: D3, H4, Q2.     

Openness and the Environmental Kuznets Curve: Evidence from China

This paper investigates the relationship in China between trade, growth and emissions using provincial-level data for water (chemical oxygen demand: COD) and air (sulphur dioxide: SO₂). It analyses the period 1990–2007 in three steps. First, the income ‘turning point’ of the Environmental Kuznets Curve (EKC) has been estimated using quadratic log function and obtained a turning point consistent with existing studies. Second, adopting Dean's (2002) simultaneous equations system, the relationships between trade, growth and emissions has been estimated and the results confirm the dominance of scale effects over technique effects. Third, the estimated per capita turning point for EKC is used to split the provincial industrial database into two groups (below and above turning point income) and simultaneous equations are estimated separately for them. The split sample provided limited support for the trade-induced emissions hypothesis for COD, but not for SO_2. At the provincial level rising incomes via increased levels of international trade were associated with falling COD due to the technique effect, so that rising incomes among the provinces tended to be associated with lower emissions. Stricter environmental regulations are required for growing incomes because they may encourage better production techniques.     

全国农村与城镇居民人均收入的协整分析

中国农村居民人均收入和城镇居民人均收入的关系,反映了中国乡镇经济的基本特征。运用协整分析方法和误差修正模型理论,对1978—2010年全国农村居民人均收入和城镇居民人均收入的年度数据进行实证分析,分析结果表明,中国农村居民人均收入和城镇居民人均收入之间存在着一个长期稳定的均衡关系,并且建立协整模型和误差修正模型,采用Granger因果检验,得出城镇居民人均收入是农村居民人均收入的原因,并从研究结论中提出针对性的建议。     

The dynamic linkages between economic growth,environmental quality and health in Greece

Increasing economic activity ignoring environmental quality may distort economic growth, leading to a negative rate. The expected deterioration of health in the near future may lead to further environmental degradation, with a continuation of a spiral-type path towards worsening growth and efforts to catch up with the developed economies. Τhis article examines the dynamic interdependence between economic activity, health quality and environmental degradation for Greece over the period 1960–2012. We employ Kuznets-type models and apply several co-integration techniques along with Granger causality tests. The results reveal strong causal effects, running from income towards CO₂ and infant mortality. In the multivariate context, a significant long-run impact is directed towards infant mortality, with economic growth performing rather exogenously.     

Does diversity matter? A fresh inquiry into the energy,economy and environment nexus

ABSTRACT

The article extends the literature on the nexus among economy, environment and energy by incorporating an index of electricity generation diversity in production and emission functions. The index is mathematically equivalent to Herfindahl–Hirschman index. The index captures substantial information regarding the ongoing energy transition at the global level. The results obtained through pooled mean group estimation, on a dataset of fairly diversified group of countries, indicate that if diversity index increases by a percentage point, per capita income increases by 2.4% and per capita emissions are reduced by 0.71%. This is against the conventional wisdom in favour of specialization. The study has found some interesting long-run causal pathways. Firstly, the causality runs from diversification to income. Secondly, there is a causality running from electricity consumption to specialization. Thirdly, bi-directional causality runs between emissions and specialization. The results have interesting policy implications. The study supports the growth hypothesis that the electricity consumption drives the economy. As this inevitably increases emissions, a better pathway is through diversification. The fossil fuel intensive pathway may have been the preferred choice in the past for countries with low electricity consumption; the diversified portfolio appears to be prudent in the future.     

Testing the tourism-induced EKC hypothesis: The case of Singapore

This study investigates the relationship between tourism development and carbon emissions in Singapore through testing Environmental Kuznets Curve hypothesis, which is a major tourist destination state and whose economy is linked with diverse energy resources, high-level urbanization, and rapid industrialization. Results reveal that tourism development and carbon emissions are in long-term equilibrium relationship; carbon dioxide emission converges to its long-term equilibrium level by 76.0% speed of adjustment through the channels of tourism, energy consumption, and output growth. Tourist arrivals have a negatively significant effects on carbon dioxide emission levels both in the long-term and the short-term periods. Finally, results of the Granger causality tests reveal that there is unidirectional causality that runs from tourism development to carbon emission growth in the long-term of the economy of Singapore. Therefore, the tourism-induced EKC hypothesis is confirmed in the case of Singapore.     

Is the Green Solow Model Valid for $$\hbox {CO}_{2}$$ Emissions in the European Union?

This paper addresses the \(\hbox {CO}_{2}\) emission patterns of the European Union from 1950 to 2010, and examines the validity of the Green Solow model, which simulates \(\hbox {CO}_{2}\) emissions growth by including only Solow forces and assuming emission intensity growth to be exogenous and constant. This study verifies that an environmental Kuznets curve (EKC) trajectory exists for per capita \(\hbox {CO}_{2}\) emissions in the European Union, that emission intensity growth is decreasing over time, and that the decreasing intensity growth reflects variations of the dependent variable in the specifications of the Green Solow model. The critique by Stefanski (On the mechanics of the Green Solow model. OxCarre Research Paper 47, OxCarre & Laval University, Oxford, 2013) of the Green Solow model assumption of exogenous and constant intensity growth is validated. The EKC is defined as the emissions plotted against income and emission intensity is defined as the ratio of emissions to income. The EKC and emission intensity share identical definitions and similar transition trajectories over time. The transition of the EKC trajectory and decline in emission intensity growth began before worldwide attention was focused on global warming.     

Economic growth drag in the Central China: evidence from a panel analysis

This article employs recently developed panel methods to test for unit roots, cointegration and Granger causality to justify and estimate the drag induced by resource constraint and environmental pollution for the Central China. The results of the panel cointegration test show that there is a stable long run relationship amongst total output, capital, labour, land, water and SO₂ when total output is the dependent variable. The results of the causality test with Error Correction Model (ECM) analysis suggest that the available water resource and environmental pollutant have no impacts on total output temporarily, but in the long‐run there is a Granger causality running from these variables to total output, indicating the economic growth drag induced by the natural resource and environmental pollution can be further estimated. Given the stable cointegration and significant Granger causality being, the study shows that the drag on the total output reduces annual economic growth rate by about 1.1 percentage points for the Central China as a whole and there is a significant difference on the aggregated and disaggregated drags for the six provinces, which indicates that natural resource and environmental constraints so far incorporated into production probably have a modest effect over the past 31 years for the Central China.     

江苏苏南地区环境库茨涅茨曲线实证研究

EKC假说是指在经济发展早期环境质量逐渐恶化,经济发展到一定水平后,环境质量会逐渐改善,即环境压力和经济增长之间呈倒U形关系。文章以苏南地区1986—2004年经济发展和环境面板数据为基础,建立了苏南地区经济发展和工业污染排放的计量模型,以此来分析苏南地区经济增长与环境污染的演替轨迹。结果表明苏南地区环境污染与经济增长之间呈现N型波动EKC特征,工业污染排放量随着人均GDP的快速提高而波浪式地不断恶化,而不同于以往的经典理论中倒U型的形状。苏南地区依然处于污染排放量的增长期,如何抓住机遇,调整产业结构,加大环保投入,转变经济增长方式,平稳地实现转折,实现环境和经济的双赢是苏南地区可持续发展和率先实现全面小康的首要问题。     

我国的货币政策是否应对股价变动做出反应?

本文运用现代协整分析、误差修正模型和格兰杰因果分析等现代时间序列分析方法 ,实证考察了若干发达国家和新兴发展中国家 (地区 )股价指数和实际国内生产总值以及消费价格指数之间的动态关系 ,发现当一国股市发展到一定水平时 ,股指与实体经济间存在着较为显著的多重协整关系和双向因果关系 ;也考察了我国上证综指与实际国内生产总值之间的动态关系 ,发现股指与实体经济间存在着双重协整关系和单向因果关系 ;最后 ,通过进一步考察我国股市的财富效应和投资效应及理论分析 ,可操作性地提出了我国货币政策应对股价变动做出适时反应 ,而且当前应当做出反应的政策建议。     

The export-output growth nexus in Japan: a bootstrap rolling window approach

The purpose of this article is to examine the export–output nexus in Japan by taking into account the time variation in the causal link with bootstrap Granger non-causality test and rolling estimation. The data used cover the seasonally adjusted real export and real Gross Domestic Product (GDP) for the 1957:1–2009:1 period. Standard Granger causality tests indicate no causality between export and real GDP series. On the contrary, full sample-modified Granger causality tests based on bootstrap, which are applicable irrespective of integration–cointegration properties of the data, indicate a bi-directional causal link between exports and real GDP. Accordingly, export growth should be an important factor behind Japan’s high-economic growth in the last three decades. Using parameter stability tests, we show that these results are not uniform for different sample periods and results vary due to structural changes. Using bootstrap rolling window estimation, we find that there is a positive bi-directional predictive power from the mid 1970s to the late-1980s between the series, while from the late 1990s to 2009 there is a positive predictive power only from export growth to output growth.     

The Easterlin paradox worldwide

The Easterlin paradox states that, although richer people report higher levels of well-being within one country, no such relationship exists across countries or over time. Several authors disagree and claim a robust positive relationship. A percentage increase of income always leads to higher well-being. This article reassesses the relationship, but analyses regional differences. I find that the positive relationship is strong in Eastern Europe, the Middle East and North African countries and Latin America. The relationship is not significant in Western Europe and Asia. In North America/Oceania and Sub-Saharan Africa, the marginal effect even becomes negative. Materialistic attitudes or the degree of collectivism may serve as explanations for the findings.     

Environmental Kuznets Curve with Adjusted Net Savings as a Trade‐Off Between Environment and Development

The Environmental Kuznets Curve (EKC) hypothesises that emissions first increase at low stages of development then decrease once a certain threshold has been reached. The EKC concept is usually used with per capita Gross Domestic Product as the explanatory variable. As others, we find mixed evidence, at best, of such a pattern for CO₂ emissions with respect to per capita GDP. We also show that the share of manufacture in GDP and governance/institutions play a significant role in the CO₂ emissions–income relationship. As GDP presents shortcomings in representing income, development in a broad perspective or human well‐being, it is then replaced by the World Bank's Adjusted Net Savings (ANS, also known as Genuine Savings). Using the ANS as an explanatory variable, we show that the EKC is generally empirically supported for CO₂ emissions. We also show that human capital and natural capital are the main drivers of the downward sloping part of the EKC.     

Carbon dioxide emission and income: A temporal analysis of cross-country distributional patterns

This paper explores the relationship between the inter-country income inequality and CO₂ emission and temporal shifts in such a relationship. It also examines how the mean per capita CO₂ emission and its distributional inequality are related to the corresponding mean and the distributional inequality of income. The analysis is based on a cross-country panel data set at the level of country-group. Here environmental damage is treated as a private good and the technique of Lorenz and specific concentration curve analysis have been used as the basic analytical framework to argue that distributional inequality of income should be an explanatory variable in the Environmental Kuznets Curve relationship, along with the mean income level. In the empirical exercise, Johansen's cointegration analysis technique is used to explore existence of statistically significant cointegrating vector(s) relating mean emission and Specific Concentration Ratio of emission to mean income level and Lorenz Ratio of income, using a set of country-group specific time series data set which covers four country-groups (viz., Africa, America, Asia and Europe) and the World as a whole. The empirical results confirm that the inter-country income inequality has significant effect on the mean emission level and inter-country inequality of emission level for most of the country-groups considered.     

Population growth and development: the case of Bangladesh

In a poor, overly populated country such as Bangladesh, some believe that a high rate of population growth is a cause of poverty which impedes economic development. Population growth would therefore be exogenous to economic development. However, others believe that rapid population growth is a consequence rather than a cause of poverty. Population growth is therefore endogenous to economic development. Findings are presented from an investigation of whether population growth has been exogenous or endogenous with respect to Bangladesh's development process during the past 3 decades. The increase in per capita real gross domestic product (GDP) is used as a measure of development. Data on population, real GDP per capita, and real investment share of GDP are drawn from the Penn World Table prepared by Summers and Heston in 1991. The data are annual and cover the period 1959-90. Analysis of the data indicate that population growth is endogenous to Bangladesh's development process. These findings are reflected both in the Granger causality tests and the decompositions of variances of detrended real GDP per capita and population growth.     

The EKC for SO2: Does firm size matter?

The environmental Kuznets curve hypothesis (EKC) predicts an inverse U-shaped relationship between environmental pollution and per capita income. The literature with respect to the EKC is vast but far from conclusive. This paper adds firm size to the standard EKC reduced form regression and analyses whether firm size matters once income and composition are controlled for. Results suggest that large firm countries are initially associated with higher levels of environmental damage. However, as economies develop, large firm countries find it easier to adopt more stringent environmental legislation. Once environmental damage starts to decrease, the decrease is much larger in large firm countries.     

Granger causality of the inflation–growth mirror in accession countries*

The paper presents a model in which the exogenous money supply causes changes in the inflation rate and the output growth rate. While inflation and growth rate changes occur simultaneously, the inflation acts as a tax on the return to human capital and in this sense induces the growth rate decrease. Shifts in the model's credit sector productivity cause shifts in the income velocity of money that can break the otherwise stable relationship between money, inflation, and output growth. Applied to two accession countries, Hungary and Poland, a VAR system is estimated for each that incorporates endogenously determined multiple structural breaks. Results indicate Granger causality positively from money to inflation and negatively from inflation to growth for both Hungary and Poland, as suggested by the model, although there is some feedback to money for Poland. Three structural breaks are found for each country that are linked to changes in velocity trends, and to the breaks found in the other country.