The Role of Trade and Renewables in the Nexus of Economic Growth and Environmental Degradation: Revisiting the Environmental Kuznets Curve (EKC)

Authors

Nguyen Thi Ngoc Lan, Hollins UniversityFollow

Document Type

Article

Publication Date

4-26-2017

Abstract

Based on the Environmental Kuznets Curve (EKC) hypothesis, this study investigates whether there is a revised EKC relationship between economic growth and CO2 emissions under the presence of renewable energy and trade for a panel of 35 countries whose trade openness index have remained higher than average global trade index over the period 1980-2012. By addressing similar trade characteristics rather than income levels, this paper applies a panel analysis with random effects and fixed effects to test EKC hypothesis. We use the principal component analysis to explain why CO2 emissions stands as a critical indicator of environmental quality. The results from our random-effects and country-fixed effects models, including the impacts of trade and renewables, reveal evidence of the revised EKC hypothesis within our sample. Trade is found to have a positive association with the level of CO2 emissions, while renewable energy has a negative relationship with CO2 levels. As a policy implication, countries should strengthen environmental regulations of trade agreements and encourage investment in renewables to combat climate change.

Comments

Undergraduate Research Awards - 2017 Finalist, Junior/Senior category

Recommended Citation

Nguyen Thi Ngoc Lan, "The Role of Trade and Renewables in the Nexus of Economic Growth and Environmental Degradation: Revisiting the Environmental Kuznets Curve (EKC)" (2017). Undergraduate Research Awards, Hollins University. 34.
https://digitalcommons.hollins.edu/researchawards/34