Revisiting the impacts of economic growth on environmental degradation: new evidence from 115 countries

This paper examines the causal relationship between economic growth and environmental degradation for 115 countries over the period 1990-2016. The empirical results show a long-run equilibrium relationship between the CO2, CH4 and PM2.5 emissions and their macroeconomic determinants economic growth, energy consumption, trade openness, urbanization, and transportation. The author found mixed support of the Environmental Kuznets Curve (EKC) hypothesis, confirming the U-shaped EKC for all the income countries in CO2 and an inverted U-shaped EKC both in CH4 and PM2.5 emissions for the low, lower-middle and high-income countries. In the subsequent Granger causality test, the author revealed that energy consumption and economic growth raise the level of CO2, the most significant pollutant because of their positive causal effect. Moreover, the impulse response function forecasts an inverted U-shaped EKC mostly for selected pollutants in all countries. Results suggest that promoting energy efficiency and reducing the use of fossil fuels are effective measures for reversing environmental degradation in the country.

Automated summary

This paper examines the causal relationship between economic growth and environmental degradation for 115 countries from 1990 to 2016, finding a long-run equilibrium relationship between CO2, CH4, and PM2.5 emissions and macroeconomic determinants. The study reveals mixed support for the Environmental Kuznets Curve hypothesis, with an inverted U-shaped EKC in CH4 and PM2.5 emissions for different income countries. Additionally, promoting energy efficiency and reducing fossil fuel use are effective measures for mitigating environmental degradation.