The Environmental Kuznets Curve: The Role of Renewable and Non-Renewable Energy Consumption and Trade Openness

Ben Jebli, Mehdi and Ben Youssef, Slim and Ozturk, Ilhan (2013): The Environmental Kuznets Curve: The Role of Renewable and Non-Renewable Energy Consumption and Trade Openness.

Abstract

We use panel cointegration techniques to investigate the causal relationship between CO2 emissions, renewable and non-renewable energy consumption, and trade openness in three different models for a panel of twenty five OECD countries over the period 1980-2009. Also the validity of the Environmental Kuznets Curve (EKC) hypothesis has been tested for these countries. Short-run Granger causality tests show the existence of a unidirectional causality running from the square of per capita output to per capita CO2 emissions and per capita non-renewable energy consumption and a unidirectional causality running from per capita real exports to per capita CO2 emissions. There is an indirect short-run causality running from per capita output to per capita non-renewable energy consumption. In the long-run, the FMOLS and DOLS estimates suggest that per capita GDP and per capita non-renewable energy consumption have a positive impact on per capita CO2 emissions. The long-run estimates suggest that the square of per capita GDP, per capita renewable energy consumption, and per capita real exports and imports have a negative impact on per capita CO2 emissions. Therefore, more trade openness and more use of renewable energy are efficient strategies to combat global warming.

• Item Type: MPRA Paper
• Language: English
• Keywords: Environmental Kuznets curve; Renewable energy; Non-renewable energy; Trade openness; CO2 emissions; Panel cointegration techniques.
• Subjects: C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C33 - Panel Data Models ; Spatio-temporal Models; F - International Economics > F1 - Trade > F18 - Trade and Environment; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy

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