Empirical Analysis of the Environmental Kuznets Curve

Abstract

This chapter undertakes an empirical analysis by using the most recent data of 171 countries, from the 1960–2010 period. The author introduces some elaborate estimation methods, in order to cope with some of the estimation problems addressed in Chap. 2—that is, the author carries out panel unit root tests and panel cointegration tests, and then estimates a dynamic panel data model, to examine the environmental Kuznets curve (EKC) hypothesis with regard to carbon dioxide. The analytical results show that: (1) the EKC is N-shaped formally but inverted U-shaped substantively, (2) the income level of the turning point of the whole world sample is approximately USD30,000 (2005 constant prices), and (3) the level of the turning point is relatively lower in advanced countries and higher in developing countries. Finally, the author briefly discusses the role of the Kyoto Protocol, based on the estimation results.