Evidence of Environmental Kuznets Curve for Former Soviet Union Countries

The Environmental Kuznets Curve (EKC) hypothesis states that environment deteriorates at initial stages of development, but improves as rising income levels pass beyond turning point. In empirical analysis of EKC hypothesis, the relationship between environmental degradation per capita income usually expressed as a quadratic or cubic function, where results can be evaluated with respect to the presence or absence of a turning point(s) and the significance of its parameters. The aim of this study is to analyze the Environmental Kuznets Curve hypothesis for Carbon dioxide (CO2) emissions for 15 developing post-Soviet Union countries over time period 1992-2010. Panel fixed effect model with Driscoll-Kraay standard errors and generalized least square model are applied to determine the relationship between per capita GDP and per capita CO2 emissions. Furthermore, our models are extended to examine effect of energy efficiency and alternative energy consumption on the EKC hypothesis. Also, population density and international trade are considered for the EKC hypothesis test. The results indicate that the relationship between GDP-CO2 emissions is N-shaped. Also it shows that the adoption of alternative energy use and improving of energy efficiency may significantly reduce CO2 emissions, while there is no trading effect on the CO2 emission.