Abstract
This is the first paper to use U.S. state-level data to econometrically assess education’s role in an environmental Kuznets curve setting. The empirical analysis involves testing several models to evaluate the impact of education on carbon dioxide (CO2) emissions and energy consumption and determine the shape of their interrelationships. We employ recent econometric approaches that deal with the bias arising in panel datasets due to cross-section dependence. Our findings indicate that education attainment contributes significantly and positively towards environmental improvements. Granger causality tests reveal that CO2 discharges and energy usage are caused by education. Furthermore, education exhibits a U-shaped relationship with energy consumption and carbon emissions, providing evidence that education can improve environmental quality in the long term.
Similar content being viewed by others
Notes
Even though the EKC hypothesis was tested successfully in many cases, there are important caveats which do not allow to wait for emissions to decline once certain level of income or education is reached. Kuznets’s (1955) paper has been treated as both having theoretical importance and empirical support for the inverted-U hypothesis (Fields 1980). His work was interpreted as an empirical work mainly due to the fact that he used numerical examples rather than algebra to develop his theory, something that made his arguments accessible to wider audiences. Fogel (1987) highlights the fact that Kuznets repeatedly warned about the fragility of the data that suggested his theory. Kuznets explained that even if the empirical findings prove to be valid, they belong to a limited period of time and cannot be generalized, so extreme caution must be taken when interpreting results drawn from his theory. Nevertheless, Kuznets’s caveats were not taken into account and his hypothesis was raised to the level of law despite its shortcomings.
The shape of the Kuznets curve will not necessarily be confirmed if we consider CO2 at the global scale as it is hard to achieve a global net pollution reduction (Suri and Chapman 1998).
We would like to acknowledge the fact that CO2 emission is a public good. Unlike "conventional" pollutants such as sulfur dioxide (SO2), nitrogen oxides (NOX), volatile organic compounds (VOCs), and particulate matter (PM), CO2 does not affect human health directly. Rather, it affects it through climate change effects.
The NCES educational attainment proxies suffer from discontinuity of the time series in each state (cross-section). The gaps in the time series as well as the lower number of observations preclude the implementation of the aforementioned econometric methods. We extrapolated the data to fill in the gaps in order to conduct the robustness checks.
The short time series (18 observations) for each cross-section, in contrast to the number of regressors in models (1–4), does not permit to conduct unit-root and cointegration analysis that account for common correlation.
References
Al-mulali U, Sheau-Ting L (2014) Econometric analysis of trade, exports, imports, energy consumption and CO2 emission in six regions. Renew Sust Energ Rev 33:484–498
Abosedra S, Dah A, Ghosh S (2009) Electricity consumption and economic growth, the case of Lebanon. Appl Energ 86:429–432
Ang JB (2007) CO2 emissions, energy consumption, and output in France. Energ Policy 35:4772–4778
Azomahou T, Laisney F, Van PN (2006) Economic development and CO2 emissions: a nonparametric panel approach. J Public Econ 90:1347–1363
Balaguer J, Cantavella M (2018) The role of education in the environmental Kuznets curve. Evidence from Australian data. Energy Econ 70:289–296
Baltagi BH, Feng Q, Kao C (2012) A Lagrange Multiplier test for cross-sectional dependence in a fixed effects panel data model. J Econom 170:164–177
Baltagi BH, Pesaran MH (2007) Heterogeneity and cross section dependence in panel data models: theory and applications introduction. J Appl Econ 22:229–232
Barro RJ, Lee J-W (2013) A new data set of educational attainment in the world, 1950–2010. J Dev Econ 104:184–198
Breusch TS, Pagan AR (1980) The Lagrange multiplier test and its applications to model specification in econometrics. Rev Econ Stud 47:239–253
Buiter WH (1984) Granger-causality and policy effectiveness. Economica 51:151–162
Chichilnisky G (1994) North-South trade and the global environment. Am Econ Rev 84:851–874
Chudik A, Pesaran MH (2015) Common correlated effects estimation of heterogeneous dynamic panel data models with weakly exogenous regressors. J Econom 188:393–420
Coondoo D, Dinda S (2002) Causality between income and emissions: a country group specific econometric analysis. Ecol Econ 40:351–367
Danish SS, Baloch MA, Lodhi RN (2018) The nexus between energy consumption and financial development: estimating the role of globalization in Next-11 countries. Environ Sci Pollut R 25:18651–18661
Dasgupta S, Laplante B, Wang H, Wheeler D (2002) Confronting the environmental Kuznets curve. J Econ Perspect 6:147–168
De Wit H, Altbach PG (2020) Time to cut international education’s carbon footprint. University World News. https://www.universityworldnews.com/post.php?story=20200108084344396
Dinda S (2004) Environmental Kuznets curve hypothesis: a survey. Ecol Econ 49:431–455
Dinda S, Coondoo D (2006) Income and emission: a panel-data based cointegration analysis. Ecol Econ 57:167–181
Dogan E, Turkekul B (2016) CO2 emissions, real output, energy consumption, trade, urbanization and financial development: testing the EKC hypothesis for the USA. Environ Sci Pollut R 23:1203–1213
Dreher A (2006) Does globalization affect growth? Evidence from a new index of globalization. Appl Econ 38:1091–1110
Dumitrescu EI, Hurlin C (2012) Testing for Granger non-causality in heterogeneous panels. Econ Model 29:1450–1460
Ehrhardt-Martinez K, Crenshaw EM, Jenkins JC (2002) Deforestation and the environmental Kuznets curve: A cross-national investigation of intervening mechanisms. Soc Sci Quart 83:226–243
Everett T, Ishwaran M, Ansaloni GP, Rubin A (2010) Economic growth and the environment. Defra Evidence and Analysis Series, Paper 2
Fang Z, Chang Y (2016) Energy, human capital and economic growth in Asia Pacific countries—evidence from a panel cointegration and causality analysis. Energy Econ 56:177–184
Fields GS (1980) Poverty, inequality and development. Cambridge University Press, Cambridge
Fogel RW (1987) Some notes on the scientific methods of Simon Kuznets. NBER Working Paper No. 2461.
Frank MW (2016) Annual State-Level Human Capital Measures, 1940–2015 [Data file]. Retrieved from http://www.shsu.edu/eco_mwf/inequality.html
Freeman JR (1983) Granger causality and the times series analysis of political relationships. Am J Polit Sci 27:327–358
Galeotti M, Lanza A, Pauli F (2006) Reassessing the environmental Kuznets curve for CO2 emissions: a robustness exercise. Ecol Econ 57:152–163
Gangadharan L, Valenzuela MR (2001) Interrelationships between income, health and the environment: extending the environmental Kuznets curve hypothesis. Ecol Econ 36:513–531
Geng Y, Liu KB, Xue B, Fujita T (2013) Creating a “green university” in China: a case of Shenyang University. J Clean Prod 61:13–19
Ghosh S (2009) Import demand of crude oil and economic growth: evidence from India. Energ Policy 37:699–702
Granger CWJ (1969) Investigating causal relations by econometric models and cross-spectral methods. Econometrica 37:424–438
Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110:353–377
Halicioglu F (2007) Residential electricity demand dynamics in Turkey. Energy Econ 29:199–210
Harbaugh WT, Levinson A, Wilson DM (2002) Re-examining the empirical evidence for an environmental Kuznets curve. Rev Econ Stat 84:541–551
Heerink N, Mulatu A, Bulte E (2001) Income inequality and the environment: aggregation bias in environmental Kuznets curves. Ecol Econ 38:359–367
Hill RJ, Magnani E (2002) An exploration of the conceptual and empirical basis of the environmental Kuznets curve. Aust Econ Pap 41:239–254
Horan W, Shawe R, Moles R, O’Regan B (2019) Development and evaluation of a method to estimate the potential of decarbonisation technologies deployment at higher education campuses. Sust. Cities Soc 47:101464
Hu JL, Lin CH (2008) Disaggregated energy consumption and GDP in Taiwan: a threshold cointegration analysis. Energy Econ 30:2342–2358
Im KS, Pesaran MH, Shin Y (2003) Testing for unit roots in heterogeneous panels. J Econometrics 115:53–74
Ketenci N (2018) The environmental Kuznets curve in the case of Russia. Russ J Econ 4:249–265
Kijima M, Nishide K, Ohyama A (2010) Economic models for the environmental Kuznets curve: a survey. J Econ Dyn Control 34:1187–1201
Kuznets S (1955) Economic growth and income inequality. Am Econ Rev 49:1–28
Lange A, Ziegler A (2017) Offsetting versus mitigation activities to reduce CO2 emissions: a theoretical and empirical analysis for the U.S. and Germany. Environ Resour Econ 66:113–133
Latif Z, Mengke Y, Danish LS, Ximei L, Pathan ZH, Salam S, Jianqiu Z (2017) The dynamics of ICT, foreign direct investment, globalization and economic growth: panel estimation robust to heterogeneity and cross-sectional dependence. Telemat Inform 35:318–328
Levitt T. (1983) The globalization of markets. Harvard Bus Rev, May–June, pp 92–102
Li Z, Chen Z, Yang N, Wei K, Ling Z, Liu Q, Chen G, Ye BH (2021). Trends in research on the carbon footprint of higher education: a bibliometric analysis (2010–2019). J Clean Prod 289: 125642
Li F, Dong S, Xue L, Liang Q, Yang W (2011) Energy consumption-economic growth relationship and carbon dioxide emissions in China. Energ Policy 39:568–574
Managi S, Jena PR (2008) Environmental productivity and Kuznets curve in India. Ecol Econ 65:432–440
Meschi E, Scervini F (2014) Expansion of schooling and educational inequality in Europe: the educational Kuznets curve revisited. Oxford Econ Pap 66:660–680
Milanovic B (2014) The return of “patrimonial capitalism”: a review of Thomas Piketty’s Capital in the Twenty-First Century. J Econ Lit 52:519–534
Mishkin FS (2009) Globalization and financial development. J Dev Econ 89:164–169
Mohammadi H, Ram R (2017) Convergence in energy consumption per capita across the US states, 1970–2013: an exploration through selected parametric and non-parametric methods. Energy Econ 62:404–410
Pablo-Romero MDP, Jesus JD (2016) Economic growth and energy consumption: the energy-environmental Kuznets curve for Latin America and the Caribbean. Renew Sust Energ Rev 60:1343–1350
Pablo-Romero MDP, Sánchez-Braza A (2015) Productive energy use and economic growth: energy, physical and human capital relationships. Energy Econ 49:420–429
Pesaran MH (2004) General diagnostic tests for cross section dependence in panels (Cambridge Working Papers in Economics No. 0435). Faculty of Economics, University of Cambridge, Cambridge
Pesaran MH (2006) Estimation and inference in large heterogeneous panels with a multifactor error structure. Econometrica 74:967–1012
Pesaran MH (2007) A simple panel unit root test in the presence of cross-section dependence. J Appl Economet 22:265–312
Pesaran MH (2015) Testing weak cross-sectional dependence in large panels. Economet Rev 34:1088–1116
Pesaran MH, Ullah A, Yamagata T (2008) A bias-adjusted LM test of error cross section independence. Economet J 11:105–127
Piketty T (2014) Capital in the 21st century. Harvard University Press, Cambridge
Roberts JT, Grimes PE (1997) Carbon intensity and economic development 1962–91: a brief exploration of the environmental Kuznets curve. World Dev 25:191–198
Rumbley LE (2020) Internationalization of higher education and the future of the planet. Int High Educ 100(Winter):32–34
Saboori B, Sulaiman J (2013) Environmental degradation, economic growth and energy consumption: Evidence of the environmental Kuznets curve in Malaysia. Energ Policy 60:892–905
Sapkota P, Bastola U (2017) Foreign direct investment, income, and environmental pollution in developing countries: Panel data analysis of Latin America. Energy Econ 64:206–212
Sarafidis V, Wansbeek T (2012) Cross-sectional dependence in panel data analysis. Economet Rev 31:483–531
Sargent TJ (1976) A classical macroeconomic model for the United States. J Polit Econ 84:207–237
Shafiullah M, Selvanathan S, Naranpanawa A, Chai A (2019) Examining Dutch disease across Australian regions. World Econ 42:590–613
Shahbaz M, Mallick H, Mahalik MK, Sadorsky P (2016) The role of globalization on the recent evolution of energy demand in India: Implications for sustainable development. Energ Econ 55:52–68
Shahbaz M, Nasreen S, Ahmed K, Hammoudeh S (2017a) Trade openness-carbon emissions nexus: The importance of turning points of trade openness for country panels. Energy Econ 61:221–232
Shahbaz M, Shafiullah M, Papavassiliou VG, Hammoudeh S (2017b) The CO2-growth nexus revisited: a nonparametric analysis for the G7 economies over nearly two centuries. Energy Econ 65:183–193
Shahbaz M, Shafiullah M, Khalid U, Song, M (2020) A nonparametric analysis of energy environmental Kuznets Curve in Chinese Provinces. Energ Econ 89:104814
Soytas U, Sari R, Ewing BT (2007) Energy consumption, income, and carbon emissions in the United States. Ecol Econ 62:482–489
Stern DI (2004) Environmental Kuznets Curve. Encyclopaedia of Energy vol 3. Elsevier, Amsterdam.
Stock JH (1987) Asymptotic properties of least squares estimators of cointegrating vectors. Econometrica 55:1035–1056
Suri V, Chapman D (1998) Economic growth, trade and energy: implications for the environmental Kuznets curve. Ecol Econ 25:195–208
Taskin F, Zaim O (2000) Searching for a Kuznets curve in environmental efficiency using kernel estimation. Econ Lett 68:217–223
Temple JRW (2001) Generalizations that aren’t? Evidence on education and growth. Eur Econ Rev 45:905–918
Torras M, Boyce JK (1998) Income, inequality, and pollution: a reassessment of the environmental Kuznets Curve. Ecol Econ 25:147–160
Townsend J, Barrett J (2015) Exploring the applications of carbon footprinting towards sustainability at a UK university: reporting and decision making. J Clean Prod 107:164–176
Vollebergh HRJ, Dijkgraaf E, Melenberg B (2005) Environmental Kuznets curves for CO2: Heterogeneity versus homogeneity. Environ Resour Econ 32:229–239
Waltz KN (1999) Globalization and Governance. Ps-Polit Sci Polit 32:693–700
Westerlund J (2007) Testing for error correction in panel data. Oxford B Econ Stat 69:709–748
White H, Pettenuzzo D (2014) Granger causality, exogeneity, cointegration, and economic policy analysis. J Econometrics 178:316–330
Williamson C (2017) Emission, education, and politics: An empirical study of the carbon dioxide and methane environmental Kuznets curve. Park Place Econ 25:21–33
Xu T (2018) Investigating environmental Kuznets curve in China–aggregation bias and policy implications. Energy Policy 114:315–322
Acknowledgement
We would like to thank the Editor Tomasz Zylicz and two anonymous referees for helpful comments and suggestions. All errors remain our own.
Author information
Authors and Affiliations
Corresponding author
Ethics declarations
Conflict of interest
The authors declare that they have no conflict of interest.
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Shafiullah, M., Papavassiliou, V.G. & Shahbaz, M. Is There an Extended Education-Based Environmental Kuznets Curve? An Analysis of U.S. States. Environ Resource Econ 80, 795–819 (2021). https://doi.org/10.1007/s10640-021-00610-9
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10640-021-00610-9