Analysis of the relationship between environment and economy within the environmental Kuznets Curve: The case of G-20 countries

In this study, it is aimed to examine the possible existence of the Environmental Kuznet Curve (EKC) hypothesis and the possible effects of renewable energy consumption, non-renewable energy consumption, globalization and environmental technologies on CO2 emissions, which represent environmental pollution, between 1990 and 2017 in G-20 countries. For this purpose, cross-section dependence and homogeneity tests were applied. According to the test results, stationarity was examined with CIPS and CADF in the second generation unit root tests, which take into account the heterogeneous and cross-sectional dependence of the data. Since the data are stationary at different levels, their long-term relationships were examined with the Westerlund (2008) cointegration test. CS-ARDL and AMG estimators were used to examine the effects of variables on CO2 emissions and the possible existence of the EKC hypothesis. According to the results, the EKC hypothesis is valid in the G-20 countries for the period examined. Renewable energy consumption and environmental technologies reduce CO2 emissions, while non-renewable energy consumption increases emissions. Globalization is insignificant. Finally, the causality relationship between the variables was examined with the Emirmahmutoğlu-Köse causality test. According to the causality test result, a bidirectional causality relationship was found between CO2 emission and the environmental technological patents, and between CO2 emission and non-renewable energy consumption. It was concluded that there is a one-way causality relationship from CO2 emission to renewable energy consumption.