Abstract
This paper re-investigates the time-varying impacts of economic growth on carbon emissions in the G-7 countries over a long history. In doing so, the historical data spanning the period from the 1800s to 2010 (as constructed) for each country is examined using the time-varying cointegration and bootstrap-rolling window estimation approach. Unlike the previous environmental Kuznets curve (EKC) studies, using this methodology gives us avenue to detect more than one, two, or more turning points for the economic growth-carbon emissions nexus. The empirical findings show that the nexus between economic growth and carbon emission seems over a long history to be M-shaped for Canada and the UK; N-shaped for France; inverted N-shaped for Germany; and inverted M-shaped (W-shaped) for Italy, Japan, and the USA. In addition, the possible validity of EKC hypothesis is examined for both the pre-1973 and post-1973 sub-periods. Based on this investigation, we found that an inverted U-shaped is confirmed only for the pre-1973 period in France, Italy, and the USA. These empirical evidences provide new insights to policy makers to improve environmental quality using economic growth as an economic tool for the long run by observing changes in the environmental impact of this growth from year to year.
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Notes
The bootstrap procedure gathers rational critical or p values notwithstanding the integration–cointegration nature of the model parameters, as they are calculated out of the quantitative distribution extracted against the representative information. Horowitz (1994), Mantalos and Shukur (1998), and Mantalos (2000), amidst several others, demonstrate the efficacy of this procedure. Grounded on Monte Carlo simulations, Mantalos and Shukur and Mantalos demonstrated that the outcomes are unswerving regardless the volume of sample, nature of stationarity, and error-correction procedures (homoscedastic or autoregressive conditional heteroskedasticity). Based on these arguments, all rolling experiments are carried out by means of the procedure devised by Balcilar et al. (2010).
The reason for using the clean power utilization indicator is that this energy never germinates carbon dioxide when produced. It encapsulates hydropower, nuclear, geothermal, and solar power, among others.
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Destek, M.A., Shahbaz, M., Okumus, I. et al. The relationship between economic growth and carbon emissions in G-7 countries: evidence from time-varying parameters with a long history. Environ Sci Pollut Res 27, 29100–29117 (2020). https://doi.org/10.1007/s11356-020-09189-y
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DOI: https://doi.org/10.1007/s11356-020-09189-y