Revisiting environmental Kuznets curve with HDI: new evidence from cross-country panel data

ABSTRACT

This study investigates the existence of Environmental Kuznets curve (so for EKC) for a panel of 30 countries (as three sub-groups viz. developed economies, emerging economies and developing economies) over the period of 27 years from 1990 to 2016. The EKC proposes an inverted U-shape relation between environmental degradation and economic development. Unlike other similar studies where economic development proxied through GDP growth, in this study Human Development Index (HDI) is taken as a measure of development. Thereby the EKC existence is found here as relationship between HDI and ${\mathrm{C}\mathrm{O}}_2$ emission (environmental degradation measured in terms of ${\mathrm{C}\mathrm{O}}_2$ emission). The econometric framework for this study consists of Pooled OLS model, fixed effect model and fixed effect with instrumental variable model. Results showed the strong evidence of EKC for this panel of countries and also for each individual group of the countries.

KEYWORDS:

• Human development index
• environmental Kuznets curve
• ${\mathrm{C}\mathrm{O}}_2$ emission
• panel data

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

1 https://www.rug.nl/ggdc/docs/human_capital_in_pwt_90.pdf

2 We are thankful to anonymous referee for suggesting this.

3 We are thankful to anonymous referee for suggesting this.

4 http://databank.worldbank.org/data/download/site-content/CLASS.xls

5 We are thankful to anonymous referee for suggesting to revise the group of countries and rerun the regressions.

6 Controls are $EINT$, $FFEC$, $MVAD$, $XG$, $XS$, $FDI$ and $REC$.

7 https://www.rug.nl/ggdc/docs/human_capital_in_pwt_90.pdf