Environmental Kuznets Curves for Co2: Heterogeneity Versus Homogeneity

CentER Discussion Paper Series No. 2005-25

39 Pages Posted: 4 Apr 2005

See all articles by Herman R.J. Vollebergh

Herman R.J. Vollebergh

PBL Netherlands Environmental Assessment Agency (Bilthoven); Tilburg Unversity ; CESifo Institute; Tilburg Sustainability Centre; Tilburg University - Tilburg University School of Economics and Management

Elbert Dijkgraaf

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus University Rotterdam, SEOR-ECRi

Bertrand Melenberg

Tilburg University - Center for Economic Research (CentER)

Date Written: January 2005

Abstract

We explore the emissions-income relationship for CO2 in OECD countries using various modelling strategies.Even for this relatively homogeneous sample, we find that the inverted-U-shaped curve is quite sensitive to the degree of heterogeneity included in the panel estimations. This finding is robust, not only across different model specifications but also across estimation techniques, including the more flexible non-parametric approach.Differences in restrictions applied in panel estimations are therefore responsible for the widely divergent findings for an inverted-U shape for CO2. Our findings suggest that allowing for enough heterogeneity is essential to prevent spurious correlation from reduced-form panel estimations. Moreover, this inverted U for CO2 is likely to exist for many, but not for all, countries.

Keywords: Environmental Kuznets curves, (semi) parametric estimation, heterogeneity

JEL Classification: C33, Q50, Q50, O50

Suggested Citation

Vollebergh, Herman R.J. and Dijkgraaf, Elbert and Melenberg, Bertrand, Environmental Kuznets Curves for Co2: Heterogeneity Versus Homogeneity (January 2005). CentER Discussion Paper Series No. 2005-25, Available at SSRN: https://ssrn.com/abstract=683109 or http://dx.doi.org/10.2139/ssrn.683109

Herman R.J. Vollebergh (Contact Author)

PBL Netherlands Environmental Assessment Agency (Bilthoven) ( email )

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Tilburg Unversity ( email )

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HOME PAGE: http://www.tilburguniversity.edu/webwijs/show/h.r.j.vollebergh.htm

CESifo Institute ( email )

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Tilburg Sustainability Centre ( email )

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Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands

Elbert Dijkgraaf

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
3000 DR Rotterdam, NL 3062 PA
Netherlands

Erasmus University Rotterdam, SEOR-ECRi ( email )

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H 7-34
Rotterdam, 3000 DR
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+31 10 4089650 (Fax)

HOME PAGE: http://www.ecri.nl

Bertrand Melenberg

Tilburg University - Center for Economic Research (CentER) ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2730 (Phone)

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