Reevaluating the Environmental Kuznets Curve for Carbon Dioxide Emissions: The Impact of New Technologies and Increasing Environmental Concerns

Abstract

Carbon dioxide (CO₂) emissions pose a significant threat to the planet as they contribute to global warming, which then creates extreme environmental changes. Researchers concerned with these dangers therefore have studied the connection between economic growth and carbon emissions, with some focusing closely on the Environmental Kuznets Curve (EKC). This EKC pattern proposes that rising economic growth can lead to reduced carbon dioxide emissions as countries turn away from the pollution of fossil fuels toward more environmentally beneficial alternative sources of energy. A considerable number of studies have sought to evaluate the potential for the carbon dioxide EKC, frequently with disparate outcomes. Some of these studies have revealed a CO₂ EKC for specific countries or regions but other research has shown no carbon EKCs for the same areas. Most of these studies used different datasets, models, estimation techniques, and analysis to produce their results, but this lack of uniformity has led to widely differing outcomes. We seek to provide some stability by revisiting our previous study on the CO₂ EKC using the same variables, regions, and estimation technique but with more recent data. We therefore update our dataset to include the years 1980-2019 and use Generalized Methods of Moments (GMM) regression to assess how economic development in OECD and non-OECD countries impact the likelihood of the carbon EKC. We further analyze other common factors such as population growth, trade, urbanization, and energy use in terms of their influence on carbon emissions. We find that the N-shaped pattern for OECD countries from the previous study disappears in the current study. For the non-OECD region of Latin America, the new results show a CO₂ EKC but the African and Asian EKCs from the prior study vanished.

Keywords: CO₂, Environmental Kuznets Curve, GMM. OECD, non-OECD

JEL Codes: Q53, Q56, C51

DOI: 10.7176/JESD/16-4-07

Publication date: June 30th 2025