Estimating the Environment Kuznets Curve hypothesis: Evidence from Latin America and the Caribbean countries

By Usama Al-mulali, C. Tang, Ilhan Ozturk. 2015

205 citations recorded by the source corpus.

This study explores the effect of economic growth (GDP), renewable energy consumption (RE) and financial development (FD) on CO2 emission (CO2) in Latin America and Caribbean countries. To achieve this goal, a panel CO2 model was built over the period 1980–2010. The Kao cointegration test results revealed that the variables are cointegrated. The Fully Modified OLS (FMOLS) results indicated an inverted U-shape relationship between CO2 and GDP, thus confirming the Environmental Kuznets Curve hypothesis. Furthermore, FMOLS results also revealed that FD can improve environmental quality by its negative long-run effect on CO2. However, RE has no long-run effect on CO2 indicating that the RE does not contribute to CO2 reduction. The VECM Granger causality results revealed feedback causality between GDP, RE, FD and CO2 in both short- and long-run. Additionally, Granger causality results also revealed that RE, GDP, and FD can be a good solution to reduce environmental damage since they have a causal effect on CO2. This study shows the investigated countries should increase their banking loans on green energy, energy efficiency and energy saving projects to reduce environmental damage. In addition, the above recommendation can increase the contribution of renewable energy in reducing environmental damage.

Subfields: Economics and Econometrics, Marketing, Renewable Energy, Sustainability and the Environment

View Paper: https://www.semanticscholar.org/paper/2fdadd59b7d04829c786670f33a93783a3d9a93c

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Citations in the corpus

What drives carbon dioxide emissions in the long-run? Evidence from selected South Asian Countries (2016, methodology): “The third group combined the techniques of the first two to analyze the relationship among the variables (Baek and Kim, 2011; Kasman and Duman, 2015; Al-Mulali and Ozturk, 2015; Al-Mulali et al., 2015b, 2015c; Farhani and Ozturk, 2015).”
Relationships among carbon emissions, economic growth, energy consumption and population growth: Testing environmental Kuznets Curve hypothesis for Brazil, China, India and Indonesia (2016, background): “However, Ozturk and Al-Mulali (2015) for Cambodia, Al-Mulali et al. (2015b) for Vietnam, Akbostancı et al. (2009) for Turkey, and Fodha & Zaghdoud (2010) and Mhenni, (2005) for Tunisia did not find the existence of EKC hypothesis in between environmental degeneration and economic growth.”
Effect of economic growth on CO2 emission in developing countries: Evidence from a dynamic panel threshold model (2017, background): “Al-mulali, Tang, and Ozturk (2015) studied the effect of economic growth, renewable energy consumption and financial development on CO2 emission in 18 Latin America and Caribbean countries for the period 1980–2010.”
The relationship between Co2 emissions, energy consumption, economic growth and FDI: the case of Turkey (2016, methodology): “Al-Mulali, Tang, and Ozturk (2015c) test the effect of GDP, renewable energy consumption and financial development on air pollution between the years of 1980–2010 for the Latin America and Caribbean countries by applying the fully modified OLS (FMOLS).”