Investigating the energy-environmental Kuznets curve under panel quantile regression: a global perspective

Abstract

Energy is regarded as an engine of economic growth and an important ingredient of human survival and development, but it can lead to deterioration of environmental quality. The study investigates the energy environmental Kuznets curve (EEKC) during the 1990-2017 period for 144 countries using models for total energy, renewable energy, and non-renewable energy consumptions. We employ panel mean and quantile regressions, accounting for individual and distributional heterogeneities. It is found that the EEKC sustains among the higher middle-income countries while it cannot be verified at some lower-income quantiles due to the heterogeneous nature of the different groups of countries. The relationship between economic growth, total energy, and non-renewable energy consumption is positive and non-linear. The quantile estimations revealed mixed (positive and non-linear, inverted U-shape, U-shape, and N-shape) EEKC. The maximum and minimum turning values of GDP per capita for total energy consumption (is 43,201.58 and 89,630.49), for renewable energy consumption (53,535.07 and 89,869.41), and for non-renewable energy consumption (42,188.16 and 89,487.71). Urbanization and population growth had positive impacts on energy consumption while these effects become more significant as moving from low to high-income quantiles. The study implies that while the developed nations can adopt energy-efficient policies without compromising on the growth momentum and environment, this might be not recommended for the developing nations and it would be preferable for these countries to "grow first and clean up later." The study indicates the importance of the developed nations to support the developing countries to achieve economic growth along the EEKC by transferring energy-efficient technologies.