Analysis of the environmental Kuznets curve in the NAFTA Countries, 1971-2014

Abstract

Objetive: This paper analyzes the environmental Kuznets curve (ekc) for the North American Free Trade Agreement (nafta) countries during 1971-2014. Methodology: In this regard, unit root, co-integration, and causality tests are applied making use of the data panel approach. Results: Results suggest that the series in this research are integrated of order one, and a long-run relationship among variables is observed. Besides, the ekc hypothesis is confirmed. In addition, the analysis shows that renewable energy and trade openness contribute to reducing pollution in these countries. Limitations/implications: Further research should be done to include other variables such as financial development and human capital. Originality/value: The present paper contributes to understanding the relationship between trade openness and renewable energy consumption, on the one hand, and pollution, on the other. Conclusions: Policies concerned to trade openness and environmental issues should consider renewable energy and trade to reduce pollutant emissions in these countries.

The Ecological Footprint and Kuznets Environmental Curve in the USMCA Countries: A Method of Moments Quantile Regression Analysis

“…In the first two stages (scale effect and composition effect), both variables show a positive relationship until reaching a certain income level; after this point, environmental degradation tends to decrease. These results coincide with the work of Arango et al [13] and Gómez and Rodríguez [23]. Concerning the first reference, the hypothesis of the environmental Kuznets curve is individually validated for Mexico and the United States, but not for Canada's case, while Gómez and Rodríguez [23] confirm the hypothesis for the group of the three countries.…”

“…These results coincide with the work of Arango et al [13] and Gómez and Rodríguez [23]. Concerning the first reference, the hypothesis of the environmental Kuznets curve is individually validated for Mexico and the United States, but not for Canada's case, while Gómez and Rodríguez [23] confirm the hypothesis for the group of the three countries. Regarding the RE coefficient, the negative sign means that renewable energy contributes to improving the environment.…”

“…Concerning TO, in this case, the relationship is positive and statistically significant, which implies that importing or exporting more environmentally friendly machinery and products is not enough to reduce environmental degradation measured by the EF. For this variable, the results also coincide with those of Allard et al [29], while they are different from those found in Gómez and Rodríguez [23] for these same countries, given that in this study, the authors found a negative relationship between trade openness and carbon dioxide emissions. The method of moments quantile regression was also applied to confirm the results' robustness (Table 7).…”

“…New variables have also recently been included that could help explain the behavior of the curve. For example, research on the environmental Kuznets curve hypothesis has also incorporated the consumption of renewable energy as one of the variables under study because the evidence shows that the increase in renewable energy consumption can help reduce environmental pressure and dependence on fossil fuels [16][17][18][19][20][21][22][23]. Another variable that can be considered to reduce polluting emissions is the development of patents.…”

“…However, trade can also reduce pollution and environmental degradation when trade allows access to technologies that promote environmentally friendly production [27,28]. Some works that use trade openness in the hypothesis of the environmental Kuznets curve are Allard et al [29] and Gómez and Rodríguez [23].…”