Environmental Kuznets curves: A spatial econometric approach

Abstract

Most researchers estimating environmental Kuznets curves (EKCs) implicitly assume that countries' per capita emissions are unaffected by events in neighbouring states. Using a panel of sulphur dioxide, nitrogen oxides, volatile organic compounds and carbon monoxide emissions, a conventional EKC is augmented by spatially weighted values of the dependent and independent variables. National emissions per capita of sulphur dioxide and nitrogen oxides are shown to be heavily influenced by the emissions per capita of neighbouring countries. There is also evidence that national emissions per capita of nitrogen oxides are decreased by proximity to high per capita income countries which is inconsistent with nations achieving higher environmental quality at the expense of their neighbours.