Honors College Theses

Publication Date

12-2-2015

Major

Economics (BBA)

Document Type and Release Option

Thesis (open access)

Faculty Mentor

Dr. Jaehyuk Lee

Abstract

This research empirically explores the validity of the environmental Kuznets curve (EKC) for the European Union. Data for CO2 emission per capita, GDP per capita, population density, and fossil fuel consumption percentage was gathered for the 28 countries within the European Union for years 1990-2010 and regression analysis was conducted in order to see if the EKC relationship held true. However, under this analysis, that result is inconclusive. As GDP per capita increases, CO2 increases to a certain point and then, instead of having a negative relationship, it continues to increase but at a lesser rate. The coefficients of the natural log of GDP and the natural log of GDP squared were both positive. In fact, the coefficient does not turn negative until the cubed root of the variable was taken. In order to explore this outcome, we separated the EU into two groups: first 13 members and newer members. We ran the same analysis for both groups and found that the EKC relationship was true for the first 13 members and was not true for the new members. This shows that the first 13 members are more developed and further along the left side of the Kuznets curve than the newer members, and the newer member countries have skewed the overall outcome for the EU causing them to sit further left upon the EKC.

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