Abstract:

This study, which aims at investigating economic growth and environmental pollution nexus for groups of countries with different development levels in the context of Environmental Kuznets Curve (ECC) hypothesis, is to analyze the relationship between energy consumption, real gross domestic product (GDP) per capita, the square of real GDP per capita, urbanization, trade liberalization and CO2 emissions for the period of 1980-2013 for groups of countries with different development levels. In addition, in order to examine the impact of the Kyoto Protocol which came into force in 2005 on carbon emissions, a dummy variable was used for energy consumption in 2005. According to the findings, the existence of the ECC hypothesis is validated for lower middle income and upper middle income country groups, while the existence of the hypothesis is not validated for low income and high income country groups. In all country groups, the coefficient of energy consumption is positive and statistically significant. An increase in trade liberalization increases carbon dioxide emissions levels in lower middle income and low income country groups, whereas an increase in trade liberalization in upper middle income country group reduces the emission level. An increase in urbanization in developed and underdeveloped countries reduces CO2 emissions while increasing CO2 emissions in the upper middle income and lower middle income groups. In the high income country group, the coefficient of the Kyoto dummy variable is negative and statistically significant; it has a positive sign in the lower middle income country group and statistically significant.

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