Europe and the Kuznets Environmental Curve:
A Move Toward a Sustainable Economy
DOI:
https://doi.org/10.30854/anf.v31.n56.2023.923Keywords:
Kuznets environmental curve, Carbon dioxide, greenhouse gas, economic growthAbstract
Objective: To test the hypothesis of the Environmental Kuznets Curve (EKC) on Carbon Dioxide (CO2) and greenhouse gas emissions for European Union (EU) countries during the period 1990-2012. Methodology: Input was taken from the World Bank database, which contains 21 indicators: agriculture and rural development, efficiency, economic growth, education, energy and mining, environment, the financial sector, health, infrastructure, labor and social protection, poverty, the private sector, the public sector, science and technology, social development, urban development, gender, sustainable development objectives, climate change, external debt, and trade. Based on this, a panel data model was estimated using three methods: random effects, fixed effects, and first differences. Results: It is found that there is an inverted U-shaped relationship between income level (GDP per capita) and pollution indicators. However, high levels of pollution are present with an income level of a country like Luxembourg, which may be due to a decreasing underperformance in GDP per capita with respect to pollution levels. Likewise, it is found that energy use, population, and the industrial sector contribute to increasing levels of environmental deterioration. Conclusions: The relationship between economic growth and environmental degradation should not only focus on the economic structure. Solutions to this type of problem must be a part of the economic policy of the EU countries and the policy’s implementation in the Sustainable Development Goals (SDGs).
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