Examining the relationship between pollution and economic growth in Europe

Abstract

This study examines the relationship between the carbon dioxide emissions and economic growth for 28 European countries from 1995 to 2014. By estimating a fixed effects model, we conclude that there is empiric evidence in favor the existence a relationship in inverted-U-Shape that is consistent with the classical hypothesis of Environmental Kuznets Curve. Additionally, we obtain as a result that the majority of countries analyzed are in the part decreasing of curve. In other words, greater numbers of countries studied are over the turning point of Environmental Kuznets Curve. Finally we expose possible measures that the countries should implement, depending on their stage of development. We distinguish between the countries that are under and upper the estimated turning point of the EKC.