Decoupling and EKC in European Union countries: a shiftshare decomposition of air emissions
Keywords:
EKC, air emissions, trade openness, factors endowments, decoupling, non-linear estimation
Abstract
This paper examines the non-linear effect of per capita GDP growth rate, trade openness, and physical and human capital endowments on air pollution in the EU region over the period 2008-2016 by decomposing air emissions into scale, composition, and technique effects. Results show a negative non-linear relationship between greenhouse and acidifying gas emissions and per capita GDP growth rate, with more open economies tending to reduce emissions both directly and indirectly through investment in physical capital. The determinants mainly affect the scale component, although the environmental improvement due to capital investment works through the technique component. There are heterogeneous effects across countries, with more pronounced environmental benefits for countries in the higher deciles of GDP and trade growth rates.
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References
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24. Wang, Q. & Zhang, F. (2021). The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries. Journal of Cleaner Production, 279, 123838, https://doi.org/10.1016/j.jclepro.2020.123838
25. Wood, R. & Lenzen, M. (2006). Zero-value problems of the logarithmic mean divisia index decomposition method. Energy Policy, 34, 1326-1331, https://doi.org/10.1016/j.enpol.2004.11.010
26. Zhao, X., Zhang, X., Li, N., Shao, S. & Geng, Y. (2017). Decoupling economic growth from carbon dioxide emissions in China: A sectoral factor decomposition analysis, Journal of Cleaner Production, 142(4), 3500-3516, https://doi.org/10.1016/j.jclepro.2016.10.117
2. Ang, B. W. (2017). LMDI decomposition approach: A guide for implementation. Energy Policy, 86, 233-238, https://doi.org/10.1016/j.enpol.2015.07.007
3. Ang, B. W. & Choi, K. I. (1997). Decomposition of the aggregate energy gas emission intensities for industry: a refined Divisia index method. The Energy Journal, 18(3), 59-73, https://www.jstor.org/stable/41322738
4. Antweiler, W., Copeland, B. R., &Taylor M. S. (2001). Is free trade good for environment?. American Economic Review, 91, 877-908, DOI: 10.1257/aer.91.4.877
5. Baldwin, R. (1995). Does Sustainability Require Growth?, in: Goldin I., Winters L. A., eds. The Economics of Sustainable Development, Cambridge University Press, 51-79.
6. Bruvoll, A. & Medin, H. (2003). Factors Behind the Environmental Kuznets Curve: A Decomposition of the Changes in Air Pollution. Environmental and Resource Economics, 24, 27-48, https://doi.org/10.1023/A:1022881928158
7. Churchill, S. A., Inekwe, J., Ivanovski, K. & Smyth, R. (2018). The Environmental Kuznets Curve in the OECD: 1870–2014. Energy Economics, 75, 389-399, https://doi.org/10.1016/j.eneco.2018.09.004
8. Cole, M.A. & Elliott, R.J.R. (2003). Determining the Trade–Environment Composition Effect: The Role of Capital, Labor and Environmental Regulations. Journal of Environmental Economics and Management, 46, 363-383, https://doi.org/10.1016/S0095-0696(03)00021-4
9. Caporin, M., Cooray, A., Kuziboev, B. & Yusubov, I. (2024). New insights on the environmental Kuznets curve (EKC) for Central Asia. Empirical Economics, 66, 2335–2354, https://doi.org/10.1007/s00181-023-02520-9
10. Copeland, B. R. & Taylor, M. S. (1994). North-south trade and the environment, Quarterly Journal of Economics, 109, 755-787, https://doi.org/10.2307/2118421
11. Davidson, R. & MacKinnon, J. G. (1993). Estimation and Inference in Econometrics, New York Oxford University Press
12. De Bruyn, S. M. (1997). Explaining the environmental Kuznets curve: structural change and international agreements in reducing sulphur emissions. Environment and Development Economics, 2(4), 485-508, http://www.jstor.org/stable/44379190
13. EC, Directorate-General for Climate Action. (2017). Decomposition analysis of the changes in GHG emissions in the EU and Member States – Final report, https://data.europa.eu/doi/10.2834/397144
14. Gallant, A. R. (1975), Seemingly unrelated nonlinear regressions. Journal of Econometrics, 3(1), 35-50, https://doi.org/10.1016/0304-4076(75)90064-0
15. Grossman, G. M. & Krueger, A. B. (1991). Environmental impact of a North American Free Trade Agreement, NBER Working Paper Series, 3914, DOI: 10.3386/w3914
16. Hipólito Leal, P. & Cardoso Marques, A. (2022). The evolution of the environmental Kuznets curve hypothesis assessment: A literature review under a critical analysis perspective. Heliyon, 8(11), e11521, DOI: 10.1016/j.heliyon.2022.e11521
17. Jiang, J.-J., Ye, B., Zhou, N. & Zhang, X.-L. (2019). Decoupling analysis and environmental Kuznets curve modelling of provincial-level CO2 emissions and economic growth in China: A case study, Journal of Cleaner Production, 212, 1242-1255, https://doi.org/10.1016/j.jclepro.2018.12.116
18. Lv, D. & Wang, Z. (2022). Analysis of Agricultural CO2 Emissions in Henan Province, China, Based on EKC and Decoupling. Sustainability, 14(3), 1931, https://doi.org/10.3390/su14031931
19. Naqvi, A. (2021). Decoupling trends of emissions across EU regions and the role of environmental policies. Journal of Cleaner Production, 323, 129130, https://doi.org/10.1016/j.jclepro.2021.129130
20. Selden, T. M. & Song, D. (1994). Environmental quality and development: is there a Kuznets curve for air pollution?. Journal of Environmental Economics and Management, 29, 147-162, https://doi.org/10.1006/jeem.1994.1031
21. Shafik, N. & Bandyopadhyay, S. (1992). Economic growth and environmental quality: time series and cross-country evidence. Policy Research Working Paper Series, 904, The World Bank
22. UNEP. (2011). Decoupling natural resource use and environmental impacts from economic growth. https://wedocs.unep.org/20.500.11822/9816
23. Viguier, L. (1999). Emissions of SO₂, NOx and CO₂ in Transition Economies: Emission Inventories and Divisia Index Analysis. The Energy Journal, 20(2), 59-87, http://www.jstor.org/stable/41322830
24. Wang, Q. & Zhang, F. (2021). The effects of trade openness on decoupling carbon emissions from economic growth – Evidence from 182 countries. Journal of Cleaner Production, 279, 123838, https://doi.org/10.1016/j.jclepro.2020.123838
25. Wood, R. & Lenzen, M. (2006). Zero-value problems of the logarithmic mean divisia index decomposition method. Energy Policy, 34, 1326-1331, https://doi.org/10.1016/j.enpol.2004.11.010
26. Zhao, X., Zhang, X., Li, N., Shao, S. & Geng, Y. (2017). Decoupling economic growth from carbon dioxide emissions in China: A sectoral factor decomposition analysis, Journal of Cleaner Production, 142(4), 3500-3516, https://doi.org/10.1016/j.jclepro.2016.10.117
Published
2024-10-09
How to Cite
Lodi, C., & Bertarelli, S. (2024). Decoupling and EKC in European Union countries: a shiftshare decomposition of air emissions. European Scientific Journal, ESJ, 34, 93. Retrieved from https://eujournal.org/index.php/esj/article/view/18639
Section
ESI Preprints
Copyright (c) 2024 Chiara Lodi, Silvia Bertarelli
This work is licensed under a Creative Commons Attribution 4.0 International License.
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