The environmental protection is often in conflict with catching up the highest economic level of the country. In some developed countries the higher economic level means also the higher pollution of the environment. Indeed, this is applied only till one point -- the turning point -- from which the trend is applied vice-versa, the higher the economic prosperity of the country, the lower the pollution of the environment. This phenomenon is in environmental economics called the Environmental Kuznets Curve (EKC). Diploma thesis focuses on the analysis of the EKC, from detailed description of the theoretic and econometric framework, factors influencing the EKC, to crucial studies which were published in this area of economics. In connection with the factors influencing EKC the thesis underline the important role of the environmental regulation and state or international ecologic policy, which the work is dealing in initiate part with. The aim of the work is to analyze if the EKC hypothesis is valid in reality or not. Furthermore the diploma thesis targets also the situation of the developing countries -- if they have to go through the same path as nowadays developed countries or if they on the contrary use their experiences.

The purpose of this master’s thesis is to investigate the relationship between renewable and non-renewable energy consumption, economic growth and carbon dioxide emissions per capita in Sweden in the period of 1970-2018. As indicators, the economic indicator will be represented by the per capita gross domestic product, GDP, as the environmental indicator this study will use carbon dioxide emissions per capita, CO2, and the energy use per capita will represent the energy consumption variable.  The research hypothesis is based on the idea of the classical EKC, the Environmental Kuznets Curve. Multivariate Vector Error Correction Model (VECM) approach which makes possible to evaluate non-stationary and cointegrating variables, while overcoming the omitted variable bias was used for the methodology part. Econometrics tests such as Augmented Dickey-Fuller Test and Johansen co-integration test are included, and the Granger causality test will provide four hypothesizes for the potential causalities between the included variable in this study.

Ongoing deforestation is an urgent, global issue with both direct and indirect impacts on a nation’s future development. This as change in forest cover and economic development provides an intuitive link between each other. Deforestation is driven by the expectations of economic return through exploitation of natural resources in search for economic development. The purpose of this paper is to investigate the relationship between change in forest cover and economic development in South America between 1991 and 2019. Even if deforestation is considered widely studied, it remains an empirical question how it relates to economic development. This study uses the framework of Environmental Kuznets Curve for Deforestation (EKCD), an economic theory which suggest that economic development has an inverted U-shaped relationship with deforestation. By using a fixed effect model, we find evidence of a U-shaped relationship between forest cover and income (GDP per capita). Our results indicate that a country’s forest cover decline as income raises until a turning point is reached, after which forest cover increases together with advancing economic development. Hence, provide empirical evidence of the existence of a U-shaped EKCD in South America. Furthermore, the study is conducted using average data and the turning point therefore is also an average for the continent

This thesis examines the impact of entrepreneurship, technology, and innovation on the Environmental Kuznets Curve, using data from 2006-2016. Most studies either focus on the relationship between economic growth and CO2 emissions or the relationship between business activities and economic growth. We aim to expand research by connecting the two streams and proposing a way to make economic activities more sustainable. By applying quantile regression to our panel data and grouping countries in peer groups, we can see how the impact of the independent variables vary across the CO2 emissions distribution. We found evidence for an N-shaped EKC relationship in developed countries, whilst an inverted N-shape in developing countries. Our results confirmed that renewable energy consumption has a negative effect on environmental degradation. We also found evidence that entrepreneurship increases CO2 emissions in developed countries, suggesting that policies should incentivise a greener business model. On the contrary, we found that innovation increases emissions in developing countries and decreases emissions in developed countries.Keywords Environmental Kuznets Curve hypothesis, Renewable energy, Technology,Innovation, Entrepreneurship, Sustainable development

Denna studie har syftat till att undersöka om ekonomisk tillväxt kan sägas leda till minskade koldioxidutsläpp och därmed vara en lösning på miljöproblematiken. Genom att jämföra produktionsbaserade och konsumtionsbaserade koldioxidutsläpp ger studien en uppfattning om ekonomisk tillväxt leder till minskade utsläpp eller endast en omställning i ekonomin. Studiens resultat har estimerats med en fixed effects-modell och baserats på utsläpps-och inkomstdata för 105 länder under åren 1990 till 2016. Undersökningen har visat att ekonomisk tillväxt kan leda till minskade produktionsbaserade koldioxidutsläpp men att ett liknande samband för konsumtionsbaserade utsläpp inte kan konstateras. Resultaten implicerar att minskade produktionsbaserade utsläpp reflekterar en omställning i ekonomin, snarare än minskade totala utsläpp. Utifrån resultaten dras slutsatsen att ekonomisk tillväxt inte kan sägas leda till minskade totala koldioxidutsläpp.

The environmental Kuznets curve (EKC) hypothesis describes the relationship between economic growth and environmental degradation through an inverted U-shape where environmental degradation first increases with economic growth, to later stagnate and decline as economic growth reaches specific threshold limits. The aim of this study is to investigate the EKC hypothesis when environmental degradation is measured through a country’s renewable energy implementation. This is achieved through multiple scatterplots and a Granger causality test, and the key finding are (1) that a consensus regarding the relationship between economic growth and energy consumption is missing, (2) that countries seems to significantly increase their consumption of renewable energy between US$ 30 000 - 50 000 when measured in real GDP per capita, (3) that the theoretical shape of the EKC holds for most countries, (4) a unidirectional causality running from economic growth to fossil fuel consumption for a panel of developing countries, and (5) a unidirectional causality running from economic growth to both fossil fuel and renewable energy consumption as well as a unidirectional causality running from renewable energy consumption to fossil fuel consumption for a panel of developed countries. When the EKC is measured though a country’s renewable energy implementation the hypothesis seems to hold for most countries. However, the decrease in environmental degradation is so far limited to developed countries with smaller economies and populations. These countries also need to ensure that decreases in environmental degradation is a result of underlying mechanisms like energy efficiency improvements and not other more counterproductive behaviors like outsourcing and deindustrialization.

Transportation is one of the largest sectors contributing to CO2-emissions, and has doubled its emissions in 30 years. Despite this, studies of the environmental Kuznets curve (”EKC”) often focus on stationary industry emissions. Studies of the EKC have detected an N-shape, rather than an inverted U-curve, indicating that rich nation’s emissions, in fact, increase again after the downturn. Possibly, this could be explained by a trend for inhabitants of wealthy countries with high equality to purchase local products and potentially reverse a trend of dirty-industry emigration. Local production and movement of intermediate goods demand domestic goods transportation. To my knowledge, no previous research has studied how changes in GDP/capita, trade intensity and GINI-index are related to CO2-emissions from domestic goods transportation in wealthy countries with high equality. To study the relationship, mathematical tests using Panel data with Fixed Effects Regression were used. Five countries qualified for the tests, having both high equality (lowest GINI-index) and high GDP/capita, and were included in the study for the year interval 2000-2020. Test results showed a significant correlation between the following: (1) wealth coincides positively with CO2-emissions, (2) trade intensity coincides negatively with CO2-emissions and (3) GINI-index coincides positively with CO2-emissions. Methodologically, this study contributes with the estimator GDP/GINI-index, rather than GDP solely, which could be a better estimator for the richness of a country’s population. The mathematical test results indicate that domestic goods transportation could be a reason for the increased CO2-emissions from developed wealthy countries. This could be a development of the environmental Kuznets curve.

Greenhouse Gas emission increase is largely attributed to carbon dioxide emissions as the major gas causing climate change and atmospheric warming. According to Environmental Kuznets Curve Theory (EKC), the increase in economic growth is expected to reduce the environmental pollution from carbon dioxide emission caused at the beginning stages of economic growth. In this thesis, I examined the impact of economic growth on carbon dioxide emission. The key hypothesis tested in this study is the Environmental Kuznets Curve hypothesis. Data from 1967 to 2016 from over 15 countries in North and South America, published by the World Bank were used. Since EKC posits a non-linear relationship between economic growth (GDP/capita) and Carbon dioxide emission, I used a quadratic component in the regression model. I analyzed the data using the OLS regression as my baseline model. Each country is unique in many respects that are hard to capture by a set of variables in econometrics model. This poses a challenge to estimating an unbiased estimate. Using panel data model allowed controlling for time invariant unobserved country-specific factors that could bias the estimates. I estimated a fixed effect panel regression to examine the relationship between carbon dioxide emissions and economic growth is primarily measured with Gross Domestic Product (GDP) per capita. The results of the fixed effect panel regression showed that all variables are significant, except export and inflation which were not significant. OLS could not solve the issue of heterogeneity among the variables. Estimating country-specific fixed effects model eliminates unobserved heterogeneity across countries and, therefore provides relatively unbiased estimates compared to OLS estimates. The positive correlation between Total CO2 emissions, CO2 emissions from Solid, and CO2 emissions from gas and GDP per capita suggests that carbon dioxide emissions increase as GDP/ capita increases before the turning point. The negative correlation between Total CO2 emissions, CO2 emissions from Solid, and CO2 emissions from gas and GDP per capita squared suggests that there is a polynomial (quadratic) form which is like that of inverted U-shape of the EKC curve. The coefficient, although it is very small, suggests the impact of the negative relationship after the turning point at the vertex of EKC curve is fractional. As expected, the result indicates a higher population causes an increase in total CO2 emissions. The result from CO2 emissions from liquid shows a negative relationship between the dependent variable CO2 emissions from liquid and the independent variable GDP per capita at the highest level of significance. This result is different from that of total carbon dioxide emissions, CO2 emissions from Solid, and CO2 emissions from gas. Carbon emission from liquid looks different from carbon emissions from solid and gas. There are high and constant emission throughout all the years and in all countries used in the analysis. EKC hypothesis is proven to be true for total carbon dioxide emissions, carbon dioxide emission from solid and gas. The hypothesized correlation between GDPs per capita square and CO2 emissions is statistically supported for Total CO2 emission, CO2 emission from solid and CO2 emission from gas. CO2 emissions from Solid, and CO2 emissions from gas and GDP per capita squared suggest that there is a polynomial (quadratic) form which is like that of inverted U-shape of the EKC curve. This proves that EKC model is proven to be true for my data. Policies like population policies can help in increasing growth in GDP per capita and reducing growth in the amount of carbon dioxide emissions. Population policies could play a significant role aimed at mitigating and reducing climate change.

This thesis investigates the environmental Kuznets curve (EKC) and the link between carbon emissions, energy use and economic growth in the BRICS countries within 1980-2013. The reason for analysing a sample of energy-intensive developing countries (the BRICS) is that these nations are of major concern for the global environmental challenge. The results of panel cointegration relationship estimation do not support the EKC. The estimated elasticity of carbon dioxide emissions to energy use is 0.60%, while the elasticity of economic growth to energy consumption is 1.74%. Moreover, the causality tests indicate that energy use Granger-causes carbon emissions, while economic growth, in turn, Granger-causes energy use. This thesis adds to the existing literature and can have policy relevance for the BRICS countries. Based on the results of this study, the overall recommendation is to prioritize increase in energy efficiency through technological development and use of cleaner resources of production.

The first chapter of this dissertation explores the impact of export quality on the exports of a developing and a developed country. We developed a theoretical framework using the two-country oligopolistic model with quality differentials in product. We find that enhancing export quality improves export performance of a country but it reduces domestic trade under certain conditions. In the second chapter, we test the theoretical findings of Chapter 1 empirically, using annual inter-country and intra-country trade data for 142 countries from 1963 to 2014 and by applying the gravity model of trade. We also use IMF’s Export Quality Index and Unit Value of exports to estimate a two-stage gravity model to examine the effects of producer prices and exports quality on both exports and domestic trade. Our empirical findings are consistent with our theoretical predictions. The empirical findings suggest that quality has a positive impact on international trade and a 1% increase in quality leads to an increase in total exports by 1.08%. A 1% increase in quality leads to a fall in intranational trade by 2.69%. The effect of improving export quality on the exports is more pronounced for OECD countries than the non-OECD countries. This study also discusses the policy measures that developing countries should take to compete effectively in the international market and break the cycle of over-reliance on low-quality export goods and achieve higher economic growth.The third chapter explores the impact of export quality on carbon emissions and fossil fuel energy use. We estimated an OLS with fixed effects and conducted a 2SLS analysis using data for 163 countries from 1980–2014. We have found a positiveassociation between export product quality upgrading and fossil fuel consumption for non-OECD member countries and a negative association for OECD member countries. A 1% increase in export quality increases fossil fuel consumption by 0.092% in non-OECD countries and reduces fossil fuel consumption by 1.57% in OECD countries. Similarly, we also found a positive association between export product quality upgrading and carbon emissions for non-OECD member countries and a negative association for OECD countries. A 1% increase in export quality increases carbon emissions by 0.139% in non-OECD countries and reduces carbon emissions by 1.327% in OECD countries. Our results also indicate that the Environmental Kuznets Curve (EKC) hypothesis is valid.