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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.


Undergraduate Research Awards - 2017 Finalist, Junior/Senior category

Lan Nguyen essay.pdf (99 kB)
Nguyen Thi Ngoc Lan - Submission Essay