Is the environmental Kuznets curve (EKC) hypothesis still valid for OECD countries? A comprehensive analysis across multiple sources

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Is the environmental Kuznets curve (EKC) hypothesis still valid for OECD countries? A comprehensive analysis across multiple sources - Quality & Quantity

This study aims to explore the existence of the environmental Kuznets curve (EKC) hypothesis between greenhouse gas (GHG) emissions from different resources and economic growth for the period 1990–2021. Our study focuses on Organization for Economic Co-Operation and Development (OECD) countries, which is characterized by leading economies, representing a substantial portion of the world’s economic activity and renowned for its rigorous policy analysis and comprehensive data. Furthermore, we examine the impact of foreign direct investment (FDI) inflows and renewable energy consumption on GHG emissions. To achieve this, we apply two-step System Generalized Method of Moments (GMM) estimation methodology as our principal approach. Additionally, we tested the robustness of our findings by applying alternative methodologies, two-stage least squares (2SLS) and generalized least squares (GLS). Our results confirm the existence of the EKC hypothesis for both total GHG emissions and emissions categorized by sources. Additionally, FDI has been found to increase the GHG emissions from all sources, namely energy, industry, and agricultural production and waste consumption. On the other hand, it has been shown that as renewable energy increases the GHG emission decreases. These findings are helpful for policymakers to build sound policies to reduce environmental degradation. We suggest that policymakers should promote the development of renewable energy resources and support clean energy technologies.

This study aims to examine the Environmental Kuznets Curve (EKC) hypothesis in relation to greenhouse gas (GHG) emissions and economic growth across OECD countries from 1990 to 2021. The OECD provides a unique setting for this analysis due to its advanced economies, robust policy frameworks, and extensive environmental and economic datasets. Additionally, the study assesses the role of foreign direct investment (FDI) inflows and renewable energy consumption in shaping GHG emissions.

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Go to the profile of Müzeyyen Merve Şerifoğlu
about 1 year ago

Our paper has just been published in Quality&Quantity. Looking forward to your thoughts and feedback!

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Development Economics
Humanities and Social Sciences > Economics > Economic Development, Innovation and Growth > Development Economics

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