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Re-examining the income - CO₂ emissions nexus using the new kink regression model: does the Kuznets curve exist in G7 countries?

Liu, Pei-Zhi and Narayan, Seema and Ren, Yi-Shuai and Jiang, Yong and Baltas, Konstantinos and Sharp, Basil (2022) 'Re-examining the income - CO₂ emissions nexus using the new kink regression model: does the Kuznets curve exist in G7 countries?' Sustainability, 14 (7). ISSN 2071-1050

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Abstract

More countries have made carbon neutral or net zero emission commitments since 2019. Within this context, re-examining the environmental Kuznets curve (EKC) hypothesis plays an essential role in sizing up the global economic development situation and realizing the global carbon emission reduction target. A methodological challenge in testing the EKC hypothesis, which states that increasing income makes CO₂ emissions begin to decline beyond a turning point, lies in determining if this benchmark point exists. The EKC hypothesis between income and CO₂ emissions is reassessed by applying a new kink regression model for the G7 countries from 1890 to 2015. Results reveal the inverted U-shaped nexus does not exist for US, Germany, Italy, Canada and Japan. For these five countries, the EKC curve has a turning point, but the positive impact of incomes on CO₂ emissions becomes significantly smaller after the turning point. We describe this relationship as a pseudo-EKC. K.U.K. and France are the only exceptions, fitting the EKC hypothesis. Further analysis indicates that the relationship between income and SO2 emissions presents an inverted U-shaped curve. Moreover, we observe that the turning point occurs at different points in time for the different G7 countries. Therefore, environmental policies targeting pollutant emission reduction should consider the different characteristics of different pollutants and regions.

Item Type: Article
Uncontrolled Keywords: environmental kuznets curve; kink regression model; G7 countries; CO2 emissions
Divisions: Faculty of Social Sciences
Faculty of Social Sciences > Essex Business School
Faculty of Social Sciences > Essex Business School > Essex Finance Centre
SWORD Depositor: Elements
Depositing User: Elements
Date Deposited: 13 Apr 2022 15:25
Last Modified: 13 Apr 2022 15:26
URI: http://repository.essex.ac.uk/id/eprint/32681

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