engleski

Revealing the complexity in the environmental Kuznets curve set in a European multivariate framework

Reduction of harmful emissions requires a good understanding of the effects that their determinants have thereon. Using non-additive fixed-effect panel quantile regression, this paper examines the distributional heterogeneous effect of socio-economic and policy variables on greenhouse gas emissions within the framework of the environmental Kuznets curve in the European Union over the period 2004-2017. The results corroborate the heterogeneous effect of the selected variables throughout different quantiles of the greenhouse gas emission distribution. In particular, they show that the environmental Kuznets curve changes its shape: at lower quantiles, it follows a U-shaped curve, while at higher quantiles, the inverted U-shaped pattern becomes valid and significant. But, it becomes insignificant after the median. In addition, the results show that the use of efficient energy and renewable energy has the power to outweigh the scale effect. Simultaneously, it questions the efficiency of environmental and energy taxes and opens the issue of the rebound effect and the association between energy poverty and greenhouse gas emissions.

environmental Kuznets curve, classical effect, substitution effect, regulation effect, energy poverty, panel quantile regression

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