The Relationship between Carbon Dioxide Emissions and Economic Growth under the Environmental Kuznets Curve Hypothesis: A Case Study of Economic Cooperation Groups
DOI:
https://doi.org/10.55164/ecbajournal.v18i4.288106Keywords:
Economic Growth, Carbon Dioxide Emissions, Environmental Kuznets CurveAbstract
Climate change has emerged as a global threat, primarily driven by carbon dioxide (CO2) emissions resulting from economic activities, particularly the continuous expansion of the industrial sector. Therefore, this study aims to: (1) measure the level of green complexity among economic cooperation groups; (2) examine the relationship between economic growth and carbon dioxide emissions based on the Environmental Kuznets Curve (EKC) hypothesis within economic cooperation groups; and (3) investigate the factors influencing carbon dioxide emissions in these groups. The study employs panel data collected from four economic cooperation groups covering the period from 2012 to 2022 and applies the Panel Kink Regression model.
The results indicate that the average level of green complexity across the economic cooperation groups was 6.348 percent. The European Union (EU) and the Organisation for Economic Co-operation and Development (OECD) exhibited relationships consistent with the Environmental Kuznets Curve hypothesis. Furthermore, renewable energy consumption and green complexity were found to have a negative effect on carbon dioxide emissions. In addition, high institutional quality within the ASEAN Economic Community (AEC) and the income effect following the implementation of the Paris Agreement were identified as significant factors contributing to the reduction of carbon dioxide emissions. Therefore, governments should promote greater investment in research and green technologies to enhance the production structure of green products, while also improving institutional quality and transparency to ensure the effective enforcement of stringent environmental regulations.
References
Apergis, N., & Payne, J. E. (2010). Renewable energy consumption and economic growth: Evidence from a panel of OECD countries. Energy Policy, 38(1), 656–660. DOI: https://doi.org/10.1016/j.enpol.2009.09.002
Balke, N. S., & Fomby, T. B. (1997). Threshold cointegration. International Economic Review, 38(3), 627–645. DOI: https://doi.org/10.2307/2527284
Çınar, İ. T., Korkmaz, I., & Şişman, M. Y. (2023). Green complexity, economic fitness, and environmental degradation: Evidence from US state-level data. Environmental Science and Pollution Research, 30(15), 43013–43023. DOI: https://doi.org/10.1007/s11356-022-19859-8
Doğan, B., Driha, O. M., Balsalobre-Lorente, D., & Shahzad, U. (2021). The mitigating effects of economic complexity and renewable energy on carbon emissions in developed countries. Sustainable Development, 29(1), 1–12. DOI: https://doi.org/10.1002/sd.2125
Hanif, S., & Nawaz, M. A. (2024). Economic complexity, green technologies and environmental degradation in world’s top polluting countries: Evidence from advance panel estimation. Pakistan Journal of Humanities and Social Sciences, 12(3), 2605–2615. DOI: https://doi.org/10.52131/pjhss.2024.v12i3.2481
Hansen, B. E. (2017). Regression kink with an unknown threshold. Journal of Business & Economic Statistics, 35(2), 228-240. DOI: https://doi.org/10.1080/07350015.2015.1073595
Hausmann, R., Hidalgo, C. A., Bustos, S., Coscia, M., Chung, S., Jimenez, J., & Yıldırım, M. A. (2014). The atlas of economic complexity. MIT Press.
International Energy Agency. (2024). CO2 emissions in 2023. Paris: IEA. https://www.iea.org/reports/co2-emissions-in-2023
IPCC. (2023). Climate Change 2023: Synthesis Report. Intergovernmental Panel on Climate Change.
Isik, M., & Devadoss, S. (2006). An analysis of the impact of climate change on crop yields and yield variability. Applied Economics, 38(7), 835–844. DOI: https://doi.org/10.1080/00036840500193682
Kaufmann, D., Kraay, A., & Mastruzzi, M. (2010). The worldwide governance indicators: Methodology and analytical issues (World Bank Policy Research Working Paper No. 5430). World Bank. https://hdl.handle.net/10986/3913
Levin, A., Lin, C. F., & Chu, C. S. J. (2002). Unit root tests in panel data: Asymptotic and finite-sample properties. Journal of Econometrics, 108(1), 1–24. DOI: https://doi.org/10.1016/S0304-4076(01)00098-7
Liu, P. Z., Narayan, S., Ren, Y. S., Jiang, Y., Baltas, K., & Sharp, B. (2022). Re-examining the income–CO2 emissions nexus using the new kink regression model: Does the Kuznets curve exist in G7 countries? Sustainability, 14(7), 3955. DOI: https://doi.org/10.3390/su14073955
Maneejuk, N., Ratchakom, S., Maneejuk, P., & Yamaka, W. (2020). Does the environmental Kuznets curve exist? An international study. Sustainability, 12(21), 9117. DOI: https://doi.org/10.3390/su12219117
Maneejuk, P., & Yamaka, W. (2025). Green complexity and its dual threshold effects: Balancing environmental impact and economic growth. Environmental Economics and Policy Studies, 28, 565–592. DOI:
https://doi.org/10.1007/s10018-025-00443-6
Mealy, P., & Teytelboym, A. (2020). Economic complexity and the green economy. Research Policy, 51(8), 103948. DOI: https://doi.org/10.1016/j.respol.2020.103948
Neagu, O. (2019). The link between economic complexity and carbon emissions in the European Union countries: A model based on the Environmental Kuznets Curve (EKC) approach. Sustainability, 11(17), 4753. DOI: https://doi.org/10.3390/su11174753
Osinubi, T. T. (2024). Does economic complexity influence carbon emissions? Evidence from Next Eleven countries. Economics and Culture, 21(1), 64–76. DOI: https://doi.org/10.2478/jec-2024-0005
Palason, K., Pol-ard, P., & Rattanasamakarn, T. (2024). Analyzing the Relationship between Economic Growth and Carbon Dioxide (CO2) Emissions in Thailand: An Application of the VAR Model. Journal of Management Science and Communication, 3(2), 1–28. retrieved from https://so07.tci-thaijo.org/index.php/jmsc_journal/article/view/5587
Ram, R. (1995). Economic development and income inequality: An overlooked regression constraint. Economic Development and Cultural Change, 43(2), 425-434. retrieved from http://www.jstor.org/stable/1154506
Tokpunar, S., & Dalgıç, B. (2024). Relationship between green complexity and carbon dioxide emissions: Evidence from global panel data. Polish Journal of Environmental Studies, 33(6), 6373-6387. DOI: https://doi.org/10.15244/pjoes/183854
Wang, E. Z., & Yang, M. (2022). Green complexity and CO2 emission: Does institutional quality matter? Energy Economics, 110, 106022. DOI: https://doi.org/10.1016/j.eneco.2022.106022
Wang, Z., Danish, Baloch, M. A., & Zhang, B. (2018). The dynamic relationship between economic growth, energy consumption, and CO2 emissions: The role of institutional quality in BRICS countries. Energy, 147, 304–317.
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2026 Faculty of Economics and Business Administration, Thaksin University
This work is licensed under a Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International License.
