The inverted n-shaped relationship between economic growth and CO2 emissions: Evidence from OECD countries
Modern economic growth has led to increased levels of international trade, large-scale industrialisation, and major technological advancements, resulting in substantial negative externalities on a global scale. Among these, environmental degradation has emerged as a significant global publi...
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| Main Authors: | , |
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| Format: | Article |
| Language: | English |
| Published: |
Faculty of Economics, Belgrade
2025-01-01
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| Series: | Ekonomski Anali |
| Subjects: | |
| Online Access: | https://doiserbia.nb.rs/img/doi/0013-3264/2025/0013-32642544007B.pdf |
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| Summary: | Modern economic growth has led to increased levels of international trade,
large-scale industrialisation, and major technological advancements,
resulting in substantial negative externalities on a global scale. Among
these, environmental degradation has emerged as a significant global public
bad. Balancing economic growth objectives while addressing environmental
challenges remains a critical issue for modern society. This study examines
the relationship between economic growth and environmental degradation
across 33 OECD countries during the period 1996-2015, employing a fixed
effects model with the Driscoll-Kraay standard error estimation approach.
The analysis reveals an inverted N-shaped relationship between economic
growth and CO₂ emissions, contradicting the conventional environmental
Kuznets curve theory. The results also show that renewable energy
consumption and stronger institutional quality help reduce CO₂ emissions,
while non-renewable energy consumption and higher levels of industrial
activity have the opposite effect. |
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| ISSN: | 0013-3264 1820-7375 |