An environment kuznets curve for GHG emissions: A panel cointegration analysis

In this article, we attempt to use panel unit root and panel cointegration tests as well as the fully-modified ordinary least squares (OLS) approach to examine the relationships among carbon dioxide emissions, energy use and gross domestic product for 22 Organization for Economic Cooperation and Development (OECD) countries (Annex II Parties) over the 1971-2000 period. Furthermore, in order to investigate these results for other direct greenhouse gases (GHGs), we have estimated the Environmental Kuznets Curve (EKC) hypothesis by using the total GHG, methane, and nitrous oxide. The empirical results support that energy use still plays an important role in explaining the GHG emissions for OECD countries. In terms of the EKC hypothesis, the results showed that a quadratic relationship was found to exist in the long run. Thus, other countries could learn from developed countries in this regard and try to smooth the EKC curve at relatively less cost.