SpringerLink

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.