Assessing the Environment From Both Supply and Demand Aspects in New Emerging Countries: The LCC and the EKC Approaches

Abstract

This study delves into the validity of the Environmental Kuznets Curve (EKC) and Load Capacity Curve (LCC) hypotheses as well as the effect of energy consumption (EC) and urbanization (URBAN) on the environment in BNIVMT countries (Bangladesh, Nigeria, Indonesia, Vietnam, Mexico, and Turkey) for the years 1990–2018. Two models were employed for this purpose. The following results are attained: i-) The first model purports that the EKC hypothesis is confirmed only in Nigeria and Vietnam, but the U-shape trajectory was found in Indonesia. ii-) The findings of the second model do not provide support for the validity of LCC theory in BNIVMT countries, whereas an inverted U-shaped relationship between GDP and LCF was revealed in Bangladesh and Indonesia. iii-) Energy consumption worsens environmental quality in Bangladesh, Nigeria, Indonesia, Turkey, and the entire panel. Urbanization deteriorates the environment in Bangladesh, Indonesia, Vietnam, and Turkey, whereas it ameliorates the environment in Nigeria. iv-) The causality relationship from GDP, EC, and URBAN to the ecological footprint (EF) and the load capacity factor (LCF) is attested in Nigeria. Findings evince EC causes environmental degradation in Turkey. Urbanization causes ecological degradation in Vietnam. v-) In countries where EKC has been ratified, the LCC may not necessarily follow a U-shaped trajectory, indicating that interpretations of the EKC hypothesis based on the LCC shape may yield inconsistent results.