A SPATIAL ECONOMETRIC ANALYSIS OF ENVIRONMENTAL KUZNETS CURVE IN EUROPE

Abstract

Energy consumption has been found to be important in understanding national and global emissions. This paperinvestigates the relationships between SO2, NOx, CO, VOC, NH3, CO2 emissions, income, and energy consumptionin Europe from 1990 to 2012. Environmental Kuznets Curve literature has excluded spatial interdependence and thiscould bias the estimates. By employing the spatial Durbin model and using panel data sets from 36 Europeancountries, this study finds that there is an inverted-U shaped Environmental Kuznets Curve for SO2, NOx, CO andCO2 while NH3 emissions follow a U-shaped relationship. Results indicate that the per capita emissions fromsurrounding countries strongly influenced national per capita emissions for SO2, NOx, and VOC. Our findings alsoshow that population density has a negative direct and indirect impact on the SO2, CO, and VOC emissions ofEuropean countries.