Growth, emissions, and climate finance nexus for sustainable development: Revisiting the environmental Kuznets curve

Abstract

This article examines the relationship between growth, emissions, population density, renewable energy consumption, urban population, and climate finance using a panel data for 141 countries between 1990 and 2015. The study revisits the environmental Kuznets curve (EKC) hypothesis by focusing specifically on the developing country context. In the first analysis, the growth-emissions nexus is explained with three panel regression models. The second part investigates whether international support for developing countries, particularly climate finance on mitigation, is effective for a subpanel of 103 countries between 2002 and 2015. The EKC hypothesis is generally valid in quadratic specification, while the EKC is largely not found with clustered data and cubic polynomial functions. The effects of mitigation aid vary by dataset, implying that simply increasing mitigation aid may not be enough to reduce emissions in developing countries.