Reassessing the Environmental Kuznets Curve for CO2 Emissions : A Robustness Exercise

The number of studies seeking to empirically characterize the reduced-form relationship between a country economic growth and the quantity of pollutants produced in the process has recently increased significantly. In several cases, researchers have found evidence pointing to an inverted-U "environmental Kuznets" curve. In the case of CO2, however, the evidence is at best mixed. In this paper, we reconsider that evidence by assessing how robust it is when the analysis is conducted in a different parametric setup and when using alternative emissions data, from the International Energy Agency, relative to the literature. Our contribution can be viewed as a robustness exercise in these two respects. The econometric results lead to two conclusions. Firstly, published evidence on the EKC does not appear to depend upon the source of the data, at least as far as carbon dioxide is concerned. Secondly, when an alternative functional form is employed, there is evidence of an inverted-U pattern for the group of OECD countries, with reasonable turning point, regardless of the data set employed. Not so for non-OECD countries as the EKC is basically increasing (slowly concave) according to the IEA data and more bell shaped in the case of CDIAC data.