Carbon Dioxide Emissions and Economic Growth: Panel Data Evidence from Developing Countries

Energy Policy 38(1): 661-666, 2010

Posted: 10 Jun 2012  

Paresh Kumar Kumar Narayan

Deakin University - School of Accounting, Economics and Finance

Seema Narayan

affiliation not provided to SSRN

Date Written: 2010

Abstract

In this paper we test the Environment Kuznet's Curve (EKC) hypothesis for 43 developing countries. We suggest examining the EKC hypothesis based on the short- and long-run income elasticities; that is, if the long-run income elasticity is smaller than the short-run income elasticity then it is evident that a country has reduced carbon dioxide emissions as its income has increased. Our empirical analysis based on individual countries suggests that Jordan, Iraq, Kuwait, Yemen, Qatar, the UAE, Argentina, Mexico, Venezuela, Algeria, Kenya, Nigeria, Congo, Ghana, and South Africa-approximately 35 per cent of the sample-carbon dioxide emissions have fallen over the long run; that is, as these economies have grown emissions have fallen since the long-run income elasticity is smaller than the short-run elasticity. We also examine the EKC hypothesis for panels of countries constructed on the basis of regional location using the panel cointegration and the panel long-run estimation techniques. We find that only for the Middle Eastern and South Asian panels, the income elasticity in the long run is smaller than the short run, implying that carbon dioxide emission has fallen with a rise in income.

Suggested Citation

Narayan, Paresh Kumar Kumar and Narayan, Seema, Carbon Dioxide Emissions and Economic Growth: Panel Data Evidence from Developing Countries (2010). Energy Policy 38(1): 661-666, 2010 . Available at SSRN: https://ssrn.com/abstract=2080547

Paresh Kumar Kumar Narayan (Contact Author)

Deakin University - School of Accounting, Economics and Finance ( email )

221 Burwood Highway
Burwood, Victoria 3215
Australia

Seema Narayan

affiliation not provided to SSRN ( email )

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