Carbon Emissions and Income Trajectory in Eight Heterogeneous Countries: The Role of Trade Openness, Energy Consumption and Population Dynamics

  • OLUWOLE OWOYE Western Connecticut State University
  • OLUGBENGA A. ONAFOWORA Susquehanna University
Keywords: CO2 emissions, energy consumption, economic growth, trade openness, population density, ARDL CO2 emissions, economic gr

Abstract

This paper examines the long-run and dynamic temporal relationships between economic growth, energy consumption, population density, trade openness, and carbon dioxide    (CO2) emissions in Brazil, China, Egypt, Japan, Mexico, Nigeria, South Korea, and South Africa based on the environment Kuznets curve (EKC) hypothesis. We employ the ARDL Bounds test to cointegration and CUSUM and CUSUMSQ tests to ensure long-run cointegration and parameter stability.  The estimated results show that the inverted U-shaped EKC hypothesis holds in Japan and South Korea.  In the other six countries, the long-run relationship between economic growth and CO2 emissions follows an N-shaped trajectory and the estimated turning points are much higher than the sample mean. In addition, the results indicate that energy consumption Granger-causes both CO2 emissions and economic growth in all the countries.  An important implication of our findings is that it would be ill-advised for the policy decision makers to adopt the EKC postulate as the conceptual basis for policies favoring economic growth unconditionally. A wide range of policy initiatives that would induce increased demand for better environment quality and its sustainability should be explored in tandem with measures to spur economic growth.

Author Biographies

OLUWOLE OWOYE, Western Connecticut State University
Professor of Economics
OLUGBENGA A. ONAFOWORA, Susquehanna University
Professor of Economics, Department of Economics 
Published
11-07-2013
How to Cite
OWOYE, O., & ONAFOWORA, O. (2013). Carbon Emissions and Income Trajectory in Eight Heterogeneous Countries: The Role of Trade Openness, Energy Consumption and Population Dynamics. Journal of Global Economy, 9(2). Retrieved from http://www.rcssindia.org/jge/index.php/jge/article/view/87-125
Section
Articles