Abstract
This study tests the environmental Kuznets curve (EKC) hypothesis in the transport sector for 28 OECD countries from 1990 to 2019. As a novelty, the relationship between gross domestic product (GDP) and carbon dioxide (CO2) emissions from the transport sector is investigated with the estimation of the dynamic panel threshold regression based on the generalized method of moments (GMM) estimator by Seo and Shin (Seo and Shin, J Econom 2:169–186, 2016). This approach enables us to test EKC and capture possible nonlinearities between variables. Along with the analysis of the EKC hypothesis, our study also investigates the effects of road petroleum products consumption, renewable energy consumption, and trade openness on transport CO2 emissions. The threshold regression results, where GDP per capita is employed as the transition variable, support the nonlinear relationship between CO2 emissions from the transportation sector and GDP by rejecting the null hypothesis of no threshold effect. This finding indicates the existence of two different regimes, i.e., the lower and upper regimes, based on the optimum value of the GDP per capita. Economic growth damages the environment in the lower regime, whereas it improves environmental quality in the upper regime. Therefore, the results indicate the presence of an inverted U-shaped relationship and support the EKC hypothesis in the OECD transportation sector. As a result, it is concluded that achieving sustainable economic growth is critical for investing in environmentally friendly technologies required to achieve the goal of reducing transportation-related CO2.
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Notes
We also employed the panel augmented mean group (AMG) estimator to examine the EKC hypothesis. However, we confronted a multicollinearity problem due to the use of the square of real GDP in the model specification.
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Abdurrahman Nazif Çatık: conceptualization, methodology, software, validation, investigation, formal analysis, writing—review and editing, supervision. Ali İlhan: conceptualization, methodology, software, validation, investigation, formal analysis, writing—original draft. Coşkun Akdeniz: conceptualization, methodology, software, validation, investigation, formal analysis, writing—original draft.
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Çatik, A.N., İlhan, A. & Akdeniz, C. Testing the environmental Kuznets curve hypothesis in the transport sector for OECD countries: a dynamic panel threshold approach. Environ Sci Pollut Res 31, 6372–6384 (2024). https://doi.org/10.1007/s11356-023-31468-7
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DOI: https://doi.org/10.1007/s11356-023-31468-7