Abstract:

With environmental problems coming to the fore on a global scale, it has emerged that environmental problems cannot be handled independently from economic development and social factors, and that the dimensions and direction of the relations of these factors with each other should be examined as a whole. In this direction, the Environmental Kuznets Curve (ÇKE) hypothesis has been put forward regarding the existence and form of the relationship between environmental quality and economic growth. This hypothesis basically argues that there is a relationship between environmental degradation and economic growth, and while environmental degradation is observed in the first phase of economic growth, environmental degradation gradually decreases after economic growth reaches a certain point. The aim of this study is to investigate whether the Environmental Kuznets Curve hypothesis is valid for the G7 countries (Germany, United States of America, England, Italy, France, Japan and Canada) using linear panel data methods. Covering the 1981-2018 period, GDP per capita, CO2 emissions per capita and population growth rate variables are considered as data set. First, the cross-section dependencies of the series of the variables used in the study were examined and their stationarities were analyzed by panel unit root tests. In order to test whether there is a long-term relationship between the variables in the panel, panel cointegration tests were applied and the validity of the EKC was tested by estimating the long-term coefficients. As a result of the analysis, it was determined that the Environmental Kuznets curve is valid in G7 countries. Accordingly, when the per capita GDP reaches $34453.59, it is determined that there will be a decreasing trend in environmental degradation.

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