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The Stability of the Adjusted and Unadjusted Environmental Kuznets Curve SummaryIn our paper, we test the stability of the unadjusted and adjusted Environmental Kuznets Curve (EKC). Our results provide evidence in favour of the significance of the adjusted EKC hypothesis in which the impact of per capita GDP on the intensity of CO2 emissions is evaluated conditionally to the effects of the energy-supply infrastructure and of additional socio-demographic variables. In this framework, the GDP-CO2 relationship appears robust to the inclusion of additional regressors and to changes in the estimation period and interval. In our paper, we test the stability of the unadjusted and adjusted Environmental Kuznets Curve (EKC). Our results provide evidence in favour of the significance of the adjusted EKC hypothesis in which the impact of per capita GDP on the intensity of CO 2 emissions is evaluated conditionally to the effects of the energy-supply infrastructure and of additional socio-demographic variables. In this framework, the GDP-CO 2 relationship appears robust to the inclusion of additional regressors and to changes in the estimation period and interval.
Introduction"in poor countries people value more material well-being over environmental amenities, but once a country reaches a sufficient high per capita income, people give greater attention to the environment". López and Mitra (2000, p. 137) The Environmental Kuznets Curve (EKC) hypothesis postulates the existence of an "Inverted-U" shape relationship between per capita GDP and measures of environmental degradation (Panayotou, 1993 and Grossman-Krueger, 1991 and Selden-Song, 1994; ShafikBandyopadhyay, 1992;Hettige-Lucas-Wheeler, 1992, Koop, 1998. The rationale for this hypothesis is that pollution has significant health and environment effects and high abatement costs. As far as income grows, the demand for health and environmental quality rises and the production mix moves toward more information-intensive activities. Therefore, the marginal cost of pollution becomes much higher leading to a lower level of emissions in equilibrium (Holtz-Eakin-Selden, 1992). 3 Following Galeotti (2003a), it is possible to decompose this general statement into three different traditional explanations for the EKC relationship.The first is based on the well-known "stages of economic growth" argument, according to which environmental degradation tends to increase when the econom...