Examining the environmental Kuznets curve hypothesis using Bayesian model averaging

Abstract

This study investigates the income–pollution relationship by examining the environmental Kuznets curve (EKC) hypothesis. To account for the model uncertainty created by the numerous approaches proposed in the literature, the study applies a model averaging methodology. The use of such techniques leads to evidence of an N-shaped pattern between national income and carbon dioxide emissions. However, none of the models considered herein fully account for the regional heterogeneity in the income– pollution relationship. The policy implication of the findings is that in order for the national environmental strategies to converge to an effective global climate change policy, future research needs to investigate the influence of country-specific variables on the rising levels of CO2.