Dynamic Relationships Among CO2 Emissions, Energy Consumption, Economic Growth, and Economic Complexity in France

Abstract

Environmental degradation is most often brought to the agenda by arousing the attention of scholars, and there has been an increase in the studies on this issue. This paper re-estimates the environmental Kuznets curve in France over the period of 1964–2011. To this end, the unit root test with one structural break and a cointegration analysis with multiple endogenous structural breaks are considered. The impacts of the energy consumption and the economic complexity on CO2 emissions are also included in dynamic empirical models. First, it is found that the environmental Kuznets curve hypothesis is valid in France in both the short and the long run. Second, the positive impact of energy consumption on CO2 emissions is also observed in the long run. Third, it is observed that a higher economic complexity suppresses CO2 emissions in the long run. The evidence suggests important environmental policy implications to suppress CO2 emissions in France.

Keywords: environmental Kuznets curve, energy consumption, economic complexity, time series modeling, structural breaks, French economy

JEL Classification: Q56, Q55, O13, C32