EVALUATION OF THE RELATIONSHIP BETWEEN ENERGY CONSUMPTION, ECONOMIC GROWTH, AND CARBON EMISSIONS IN THE CONTEXT OF THE N-SHAPED ENVIRONMENTAL KUZNETS CURVE: NEWLY INDUSTRIALIZED COUNTRIES (NICS)

Year 2023, , 453 - 469, 27.09.2023

Tuğba İnci

https://doi.org/10.17065/huniibf.1209596

Abstract

Climate change and environmental degradation have become an issue that has focused on the whole world in recent years. In many studies on this subject, the existence of an inverted U-shaped Kuznets Curve has been analyzed. In this study, a model was established to analyze the N-shaped Kuznets Curve in order to see the long-term position of the relation between economic growth andenvironmental degradation. New industrialized Countries (NICs), which have a substantial effect on world carbon emissions, are also discussed in the study. Panel data analysis was used to examine the relationship between environmental degradation and economic growth over the period from 1970 to 2019.In the analysis, first of all, the cross-section dependence (CSD) was tested and it was decided that the second-generation tests would be continued according to the results. In the subsequent Westerlund hand-integration analysis, it was concluded that there was co-integration between the series and that they would act together in the long run. Finally, the CCE method, which is one of the long-term estimators, was used and analyzes were carried out by establishing three different models. As a result of the analysis, it was concluded that energy consumption positively affects carbon emissions, the existence of an inverted U-shaped Kuznets Curve for the entire panel and the existence of an N-shaped Kuznets Curve throughout the panel could not be proven.

Keywords

Economic Growth, Environmental Kuznets Curve, Carbon Emission, Energy Consumption

Enerji Tüketimi, Ekonomik Büyüme ve Karbon Emisyonları İlişkisinin N-Şekilli Çevresel Kuznets Eğrisi Bağlamında Değerlendirilmesi: Yeni Sanayileşmiş Ülkeler (NICs)

Abstract

İklim değişikliği ve çevresel bozulma son yıllarda tüm dünyanın üzerinde yoğunlaştığı bir konu haline gelmiştir. Bu konuya yönelik olarak yapılan birçok çalışmada Ters U şeklinde Kuznets eğrisinin varlığı analiz edilmiştir. Bu çalışmada çevresel bozulma ve ekonomik büyüme arasındaki ilişkinin uzun vadedeki pozisyonunu görebilmek için N şekilli Kuznets Eğrisini de analiz etmeye yönelik model kurulmuştur. Çalışmada ayrıca dünya karbon emisyonuna ciddi oranda etkide bulunan yeni sanayileşmiş ülkeler (NICs) ele alınmıştır. 1970'ten 2019'a kadar geçen süre içinde çevresel bozulma ve ekonomik büyüme arasındaki ilişkiyi incelemek için panel veri analizi kullanılmıştır. Analizde öncelikle yatay kesit bağımlılığı (CSD) test edilmiş ve sonuçlara göre ikinci nesil testleri ile devam edileceği kararına varılmıştır. Ardından yapılan Westerlund eşbütünleşme analizinde seriler arasında eşbütünleşme olduğu ve uzun dönemde birlikte hareket edecekleri sonucu elde edilmiştir. Son olarak uzun dönem tahmincilerinden CCE metodu kullanılmış ve üç ayrı model kurularak analizler gerçekleştirilmiştir. Analizler neticesinde enerji tüketiminin karbon emisyonunu pozitif yönde etkilediği, panelin geneli için ters U şeklinde Kuznets Eğrisinin varlığının ve yine panelin genelinde N şekilli Kuznets eğrisinin varlığının kanıtlanamadığı sonuçlarına ulaşılmıştır

Keywords

Enerji Tüketimi, Ekonomik Büyüme, Çevresel Kuznets Eğrisi, Karbon Emisyonu

References

• Acosta-Pazmiño, I. P., Rivera-Solorio, C. I., & Gijón-Rivera, M. (2021). Scaling-up the installation of hybrid solar collectors to reduce CO2 emissions in a Mexican industrial sector from now to 2030. Applied Energy, 298, 117202.
• Ahmad, N., Du, L., Lu, J., Wang, J., Li, H. Z., & Hashmi, M. Z. (2017). Modelling the CO2 emissions and economic growth in Croatia: is there any environmental Kuznets curve?. Energy, 123, 164-172.
• Alam, M. M., Murad, M. W., Noman, A. H. M., & Ozturk, I. (2016). Relationships among carbon emissions, economic growth, energy consumption and population growth: Testing Environmental Kuznets Curve hypothesis for Brazil, China, India and Indonesia. Ecological Indicators, 70, 466-479.https://doi.org/10.1016/j.ecolind.2016.06.043.
• Aslam, B., Hu, J., Hafeez, M., Ma, D., AlGarni, T. S., Saeed, M., Abdullah, M. A.,& Hussain, S. (2021). Applying environmental Kuznets curve framework to assess the nexus of industry, globalization, and CO2 emission. Environmental Technology & Innovation, 21, 101377.
• Awan, A., Sadiq, M., Hassan, S. T., Khan, I., & Khan, N. H. (2022). Combined nonlinear effects of urbanization and economic growth on CO2 emissions in Malaysia. An application of QARDL and KRLS. Urban Climate, 46, 101342.
• Bekun, F. V., Emir, F., & Sarkodie, S. A. (2019). Another look at the relationship between energy consumption, carbon dioxide emissions, and economic growth in South Africa. Science of the Total Environment, 655, 759-765.https://doi.org/10.1016/j. scitotenv.2018.11.271.
• Bhattarai, M.,& Hammig, M. (2001). Institutions and the environmental Kuznets curve for deforestation: a crosscountry analysis for Latin America, Africa and Asia. World development, 29(6), 995-1010.
• Boontome, P., Therdyothin, A., & Chontanawat, J. (2017). Investigating the causal relationship between non-renewable and renewable energy consumption, CO2 emissions and economic growth in Thailand. Energy Procedia, 138, 925-930. https://doi.org/10.1016/j.egypro.2017.10.141.
• Chen, Y., Zhao, J., Lai, Z., Wang, Z., & Xia, H. (2019). Exploring the effects of economic growth, and renewable and non-renewable energy consumption on China’s CO2 emissions: Evidence from a regional panel analysis. Renewable energy, 140, 341-353.
• Dai, Y., Zhang, H., Cheng, J., Jiang, X., Ji, X., & Zhu, D. (2022). Whether ecological measures have influenced the environmental Kuznets curve (EKC)? An analysis using land footprint in the Weihe River Basin, China. Ecological Indicators, 139, 108891.
• De Bruyn, S. M., van den Bergh, J. C., & Opschoor, J. B. (1998). Economic growth and emissions: reconsidering the empirical basis of environmental Kuznets curves. Ecological Economics, 25(2), 161-175.
• Dietz, T., Rosa, E. A., & York, R. (2012). Environmentally efficient well-being: Is there a Kuznets curve?. Applied Geography, 32(1), 21-28.
• Energy Statistics (2021), https://www.statista.com/statistics/263455/primary-energy-consumption-of-selected-countries/. Accessed May 2022.
• Fakher, H. A., Ahmed, Z., Acheampong, A. O., & Nathaniel, S. P. (2022). Renewable energy, nonrenewable energy, and environmental quality nexus: An investigation of the N-shaped Environmental Kuznets Curve based on six environmental indicators. Energy, 125660.
• Grossman, G. M.,& Krueger, A. B. (1995). Economic growth and the environment. The quarterly journal of economics, 110(2), 353-377.
• Grossman, G. M.,& Krueger, A. B. (1995). Economic growth and the environment. The quarterly journal of economics, 110(2), 353-377.
• Hossain, M. S. (2011). Panel estimation for CO2 emissions, energy consumption, economic growth, trade openness and urbanization of newly industrialized countries. Energy policy, 39(11), 6991-6999. https://doi.org/10.1016/j.enpol.2011.07.042.
• Hung, M. F.,& Shaw, D. (2004). Economic growth and the environmental Kuznets curve in Taiwan: a simultaneity model analysis. Boldrin, Chen and Wang (eds.), Human Capital, Trade and Public Policy in Rapidly Growing Economies: From Theory to Empirics, Aldershot, UK: Edward Elgar: 269-290.
• Li, R., Yang, T., & Wang, Q. (2022). Does income inequality reshape the environmental Kuznets curve (EKC) hypothesis? A nonlinear panel data analysis. Environmental Research, 114575.
• Liu, Y., Mabee, W., & Zhang, H. (2021). Conserving fertilizer in China's rural-agricultural development: The reversal shifts and the county-specific EKC evidence from Hubei. Cleaner Environmental Systems, 3, 100050.
• Onifade, S. T., Gyamfi, B. A., Haouas, I., & Bekun, F. V. (2021). Re-examining the roles of economic globalization and natural resources consequences on environmental degradation in E7 economies: are human capital and urbanization essential components?. Resources Policy, 74, 102435.
• Panayotou, T., Peterson, A., &Sachs, J.D. (2000). Is the Environmental Kuznets Curve Driven by Structural Change? What Extended Time Series May Imply for Developing Countries. Consulting Assistance on Economic Reform II Discussion Paper, 80: 1-35.
• Pao, H. T.,& Tsai, C. M. (2011). Modeling and forecasting the CO2 emissions, energy consumption, and economic growth in Brazil. Energy, 36(5), 2450-2458.
• Pata, U. K. (2018). Renewable energy consumption, urbanization, financial development, income and CO2 emissions in Turkey: testing EKC hypothesis with structural breaks. Journal of cleaner production, 187, 770-779.
• Pedroni, P. (2004). Panel cointegration: asymptotic and finite sample properties of pooled time series tests with an application to the PPP hypothesis. Econometric theory, 20(3), 597-625.
• Pesaran, M. H. (2006). Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica, 74(4), 967-1012.
• Pesaran, M. H. (2007). A simple panel unit root test in the presence of cross‐section dependence. Journal of applied econometrics, 22(2), 265-312.
• Pesaran, M. H.,& Yamagata, T. (2008). Testing slope homogeneity in large panels. Journal of econometrics, 142(1), 50-93.
• Pesaran, M. H., Ullah, A., & Yamagata, T. (2008). A bias‐adjusted LM test of error cross‐section independence. The econometrics journal, 11(1), 105-127.
• Pesaran, M.H.(2004). General Diagnostic Tests for Cross Section Dependence in Panels.Cambridge Working Papers in Economics.
• Pita, P., Winyuchakrit, P., & Limmeechokchai, B. (2020). Analysis of factors affecting energy consumption and CO2 emissions in Thailand's road passenger transport. Heliyon, 6(10), e05112.
• Poudel, B. N., Paudel, K. P., & Bhattarai, K. (2009). Searching for an environmental Kuznets curve in carbon dioxide pollutant in Latin American countries. Journal of Agricultural and Applied Economics, 41(1), 13-27.
• Rahman, M. M. (2017). Do population density, economic growth, energy use and exports adversely affect environmental quality in Asian populous countries?. Renewable and Sustainable Energy Reviews, 77, 506-514.
• Rahman, M. M., Nepal, R., & Alam, K. (2021). Impacts of human capital, exports, economic growth and energy consumption on CO2 emissions of a cross-sectionally dependent panel: Evidence from the newly industrialized countries (NICs). Environmental Science & Policy, 121, 24-36.
• Saba, C. S. (2023). Nexus between CO2 emissions, renewable energy consumption, militarisation, and economic growth in South Africa: Evidence from using novel dynamic ARDL simulations. Renewable Energy, 205, 349-365.
• Sadorsky, P. (2014). The effect of urbanization and industrialization on energy use in emerging economies: implications for sustainable development. American Journal of Economics and Sociology, 73(2), 392-409. https://doi.org/10.1111/ajes.12072.
• Salman, M., Long, X., Dauda, L., & Mensah, C. N. (2019). The impact of institutional quality on economic growth and carbon emissions: Evidence from Indonesia, South Korea and Thailand. Journal of Cleaner Production, 241, 118331.https://doi.org/10.1016/j. jclepro.2019.118331.
• Sarkodie, S. A.,& Strezov, V. (2018). Empirical study of the environmental Kuznets curve and environmental sustainability curve hypothesis for Australia, China, Ghana and USA. Journal of cleaner production, 201, 98-110.
• Selden, T. M.,& Song, D. (1994). Environmental quality and development: is there a Kuznets curve for air pollution emissions?. Journal of Environmental Economics and management, 27(2), 147-162.
• Soytas, U.,& Sari, R. (2009). Energy consumption, economic growth, and carbon emissions: challenges faced by an EU candidate member. Ecological economics, 68(6), 1667-1675.
• Stern, D. I.,& Kander, A. (2012). The role of energy in the industrial revolution and modern economic growth. The Energy Journal, 33(3).
• Swamy, P. A. (1970). Efficient inference in a random coefficient regression model. Econometrica: Journal of the Econometric Society, 311-323.
• Tenaw, D.,& Beyene, A. D. (2021). Environmental sustainability and economic development in sub-Saharan Africa: A modified EKC hypothesis. Renewable and Sustainable Energy Reviews, 143, 110897. Union of Concerned Scientists, Each country’s share of CO2 emissions, 2020.https://www.ucsusa.org/resources/each-countrys-share-co2-emissions. Accessed 21 May 2022.
• Wang, K., Zhu, Y., & Zhang, J. (2021). Decoupling economic development from municipal solid waste generation in China’s cities: Assessment and prediction based on Tapio method and EKC models. Waste Management, 133, 37-48.
• Westerlund, J. (2007). Testing for error correction in panel data. Oxford Bulletin of Economics and statistics, 69(6), 709-748.
• Westerlund, J. (2008). Panel cointegration tests of the Fisher effect. Journal of Applied Econometrics, 23(2), 193-233.
• World Bank (2021). World Development Indicators. http://www.World.bank.org. Accessed 16 April 2022. Yang, Q., Huo, J., Saqib, N., & Mahmood, H. (2022). Modelling the effect of renewable energy and public-private partnership in testing EKC hypothesis: Evidence from methods moment of quantile regression. Renewable Energy, 192, 485-494.
• Yang, Z.,& Zhao, Y. (2014). Energy consumption, carbon emissions, and economic growth in India: Evidence from directed acyclic graphs. Economic Modelling, 38, 533-540.https://doi.org/ 10.1016/j.econmod.2014.01.030.
• Zoundi, Z. (2017). CO2 emissions, renewable energy and the Environmental Kuznets Curve, a panel cointegration approach. Renewable and Sustainable Energy Reviews, 72, 1067-1075.