Environmental Kuznets Curve for CO2 emissions: An analysis for developing, Middle East, OECD and OPEC countries

Abstract

The purpose of this study was to determine the relevance of the Environmental Kuznets Curve, which shows that there is an inverted-U shaped relationship between environmental pollution and economic growth. We investigated the relationship between per capita income and the carbon dioxide emissions as indicators of environmental pollution in Developing Countries, OECD, Middle East and OPEC countries for the period of 1970-2016. The contribution of our study is the evaluation and comparison of Developing Countries, OECD, Middle East and OPEC countries together in the context of EKC. We employ the fixed effect and GMM techniques in this study and results obtained from cubic models indicate that the N-shaped relationship for Developing, Middle East countries and OECD countries and inverted N-shaped relationship for OPEC countries exist. Considering these conclusions, we draw some serious policy implications for the policy makers in these countries. Governments should closely follow the industries that generate CO2 emissions as after some point environmental degradation increases again as income increases. In addition adopting clean energies including wind and solar systems and making these technologies widespread across countries might reduce CO2 emissions. Another alternative way to reduce CO2 emissions might be a carbon tax which should be implemented for polluters.