The Environmental Kuznets Curve with Recycling: A Partially Linear Semiparametric Approach

Abstract

This paper is the first to study a comparatively new Environmental Kuznets Curve which traces empirically the relationship between environmental abatement and real GDP. Our model is a partial linear semi parametric model that allows for two way fixed effects to eliminate the bias arising from two sources. We use data for recycling and real GDP, for fifty states of the United States for the years between 1988 and 2017. We find evidence that this relationship is characterized by an increasing curve which confirms the existence of a J curve, a finding that agrees with the predictions from recent theoretical models.