Environmental Kuznets curves: New evidence on both panel and country-level CO2 emissions.

Using data on per capita CO2 emissions and per capita real GDP from fifteen countries, spanning the period 1960–2013, this paper tests the validity of the Environmental Kuznets Curve (EKC) using both panel-based and time-series-based methodological approaches of cointegration. Given that the EKC hypothesis postulates an inverted U-shaped relationship between emissions and output, the study tests for cointegration between per capita CO2 emissions, per capita real GDP and the squared values of per capita real GDP. The evidence from panel cointegration methodologies is mixed. This result might arise due to time dependence of cointegrating coefficients. The time-varying cointegration approaches provide strong evidence in favor of time-varying cointegration parameters. Furthermore, based on the quantile cointegration approach, the results indicate that the EKC hypothesis holds in 12 out of the 15 countries. However, even for these three countries, the EKC hypothesis seems to hold at certain quantiles.