Abstract:

Global warning and climatic changes are among the important problems of our age. Since the increasing carbon dioxide level due to greenhouse emission has a feature triggering environmental problems, the policies reducing these problems [should be determined], and precautions should be taken. The instrument, which describes the shape of relationship between environment and economy and is commonly used in the literature, is Environmental Kuznets Curve. Environmental Kuznets Curve (EKC) Hypothesis, made popular by Grossman and Krueger, was first used by Panayatou. According to the hypothesis, in the first phases of economic growth, while that income level reaches to the desirable level causes an increase in environmental pollution, beginning from a certain turning point, it is argued that it is necessary to reduce environmental pollution together with clean technologies. In the study, using the data of per capita CO2 emission and per capita GDP in EU and China for the period 1970-2020, it was aimed to test the validity of Environmental Kuznets Curve. Hypothesis. In order to test validity of hypothesis, Fourier ADF (F-ADF) Unit Root Test, developed by Christopoulos and León-Ledesma, Traditional ADF Unit Root Test, Fourier-Shin (F-Shin) Co-integration Test, developed by Tsong et al., were used. According to the results of F-ADF Unit Root Test, it was concluded that the variables contained unit root at the level and that they became stationary by taking their first differences. In order to support F-ADF test, Traditional ADF Unit Root Test was used and it was seen that the variables became stationary in their first differences. According to the results of Unit Root Test, that the variables became stationary in their differences led to continue the analysis with co-integration test. According to F-Shin Co-integration Test, due to the fact that co-integration relationship and long term coefficients are significant in European Union, it was concluded that Environmental Kuznets Curve Hypothesis was valid, while in China, it was concluded that there was only co-integration relationship and that EKC relationship was not valid.

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