Economic growth and greenhouse gases in Brazilian States: is the environmental Kuznets curve applicable hypothesis?

Abstract

The aim of this study was to analyze the existence of the Kuznets environmental curve (EKC) hypothesis for a diverse spectrum of environmental pollutants (carbon dioxide, methane, and nitrous oxide) from the Brazilian states from 1980 to 2020. In the Kuznets hypothesis, economic growth, represented by GDP per capita, grows inflection in relation to environmental degradation. Upon reaching a certain point, the relationship becomes inversely opposite, being a positive trend of growth and a retract to environmental indicators, as in the case of greenhouse gases. The application of regression models in strict observance of Grossman and Krueger’s EKC econometric model (1995) allowed a critical analysis of the Brazilian empirical model relative to pollutant emissions. The results show the corroboration of the EKC hypothesis for carbon dioxide and nitrous oxide, but not methane gas. Additionally, the discussion on the subject was extended to the debate about Brazil on the world stage. Brazil is on the world stage as a major influencer in environmental issues, so everything empirically contributes, both to academia and public managers, by presenting evidence of the relationship of economic growth aligned with sustainable development. Thus, the study provides contributions to professionals, researchers, and international readers. On the other hand, this study shows as political implications the need for improvements and reformulations of environmental policies in favor of mitigating environmental degradation.