The Environmental Kuznets Curve and Sustainable Economic Growth in Colombia

Abstract

This paper seeks to empirically test the Environmental Kuznets Curve (EKC) hypothesis in the emissions of carbon dioxide (CO₂) and nitrous oxide (N₂O) during the period 1990-2012 for 217 economies, using the World Bank database. A panel data model was carried out under three alternatives (fixed effects, random effects and first differences). The results obtained show that there is an inverted U relationship between environmental pollution (CO₂ and N₂O) and Gross Domestic Product (GDP) per capita as a measure of economic growth, with the fixed effects method generating consistent estimates when applying the Hausman test. However, the relationship between pollution and economic growth presents too low decreasing returns, which generates high turning points, mainly in emissions from CO₂.

Keywords

Environmental Kuznets Curve, environmental pollution, economic growth, economic development, technological change, panel data

Author Biography

Camilo Fabiam Gómez-Segura

Master in Economics, National University of La Plata, La Plata, Argentina. Full-time professor, Universidad Surcolombiana, Neiva, Colombia. Member of the Iguaque research group; junior researcher at the Ministry of Science, Technology and Innovation

Oscar Hernán Cerquera-Losada

Master in Economics, University of Buenos Aires, Buenos Aires, Argentina. Full-time professor, Universidad Surcolombiana, Neiva, Colombia. Member of the Iguaque research group; associate researcher at the Ministry of Science, Technology and Innovation.

Edwin Fernando Acero-Cebay

Statistics Specialist, Universidad Surcolombiana, Neiva, Colombia. Operational Coordinator, Cocoa Industry of Huila Tolimax, Neiva

References

1. Andreoni, J., & Levinson, A. (1998). The Simple Analytics of the Enviromental Kuznets Curve. NBER Working Paper Series, 15. National Bareau of Economic Research. https://doi.org/10.3386/w6739

2. Arrow, S. et al. (1995). The Environmental Kuznets Curve in the OECD: 1870-2014 . Energy Economics.

3. Awaworyi, S. et al. (2018). The Environmental Kuznets Curve in the OECD: 1870-2014. Energy Economics.

4. Bruyn, S., Van den Bergh, J., & Opschoor, J. (1998). Economic Growth and Emissions: Reconsidering the Empirical Basis of Environmental Kuznets Curves. Ecological Economics, 25, 161-175. https://doi.org/10.1016/S0921-8009(97)00178-X

5. Correa, F. (2004). Crecimiento económico y medio ambiente: una revisón análitica de la hipótesis de la Curva Ambiental de Kuznets. Semestre Económico, 8(15).

6. Correa, F., Vasco, A., & Montoya, C. (2005). La Curva Medioambiental de Kuznets: evidencia empírica para Colombia. Semestre Económico, 8(15).

7. Ekins, P. (1997). The Kuznets Curve for the Environment and Economic Growth: Examining the Evidence. Environment and Planning, 29, 805-830. https://doi.org/10.1068/a290805

8. Grossman, G. & Krueger, A. (1991). Environmental Impact of a North American Free Trade Agreement. National Bareu of Economic Research. https://doi.org/10.3386/w3914

9. Grossman, G., & Krueger, A. (1995). Economic Growth and the Environment. The Quarterly Journal of Economics, 110(2), 353-377. https://doi.org/10.2307/2118443

10. Kuznets, S. (1955). Economic Growth and Income Inequality. American Economic Review, 45(1), 1-28.

11. Luzzati, T., & Orsini, M. (2009). Investigating the Energy-Environmental Kuznets Curve. https://doi.org/10.1016/j.energy.2008.07.006

12. Romero, P., & De Jesús, J. (2016). Economic Growth and Energy Consumption: The Energy-Environmental Kuznets Curve for Latin America and the Caribbean. Renewable and Sustainable Energy Reviews, 60, 1343-1350. https://doi.org/10.1016/j.rser.2016.03.029

13. Rothman, D. (1998). Environmental Kuzntes Curve. Real Progress or Passing The Buck? A Case for Consumption. Based Approaches. Ecological Economics, 25(2), 177-194. https://doi.org/10.1016/S0921-8009(97)00179-1

14. Saravia, A. (2002). La curva medioambiental de Kuznets para América Latina y el Caribe. Documentos de Reflexión Académica, 23.

15. Selden, T., & Song, D. (1994). Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions? Journal of Environmental Economics and Management, (27), 147-162. https://doi.org/10.1006/jeem.1994.1031

16. Shafik, N., & Bandyopadhya, S. (1992). Economic Growth and Environmental Quality Time-Series and Cross-Country Evidenc. World Bank, Working Papers, WPS 094.

17. Shahbaz, M. et al. (2020). A Nonparametric Analysis of Energy Environmental Kuznets Curve in Chinese Provinces. Energy Economics. https://doi.org/10.1016/j.eneco.2020.104814

18. Stern, D., Common, S., & Barbier, E. (1996). Economic Growth and Environmental Degradation: A Critique of the Environmental Kuznets Curve. World Development, 24, 1151-1160. https://doi.org/10.1016/0305-750X(96)00032-0

19. Stern, D., & Common, M. (2001). Is there An Environmental Kuznets Curve For Sulphur? Journal of Environmental Economics and Management, (41), 162-178. https://doi.org/10.1006/jeem.2000.1132

20. The World Bank. (2020, 18 de mayo). Banco Mundial. htpp://www.datos.bancomundial.org

21. Wooldridge, J. (2015). Introducción a la econometría. (Vol. 5). Cenage Learning.