Testing the Environmental Kuznets Curve Hypothesis for 𝑪𝑶𝟐 Emissions

Abstract

Reducing carbon dioxide emissions and strengthening the economies of developing countries are among the most pressing issues within Sustainable Development. In order to enact effective policies to move toward Sustainable Development Goals, a deep understanding of the pollution-income relationship, and how it differs between developed and developing countries, is imperative. Using advanced panel data analysis techniques, and using the IPAT and EKC models, my results find that the relationship between carbon dioxide emissions and economic development differs for developed and developing countries. Additionally, my analysis uses carbon dioxide emissions, a global pollutant, to proxy environmental quality. My results, however, oppose those of existing literature which use local pollutants as the proxy. This may suggest that the utility gained from reducing local pollutants differs from the utility gained by reducing global pollutants. Further exploration of the differing pollution-income relationship for local and global pollutants serves as an area for future research.