A Neural Network Approach to the Environmental Kuznets Curve

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Abstract

We investigate the relationship between per capita gross domestic product and per capita carbon dioxide emissions using national-level panel data for the period 1960-2018. We propose a novel semiparametric panel data methodology that combines country and time fixed effects with a nonparametric neural network regression component. Globally and for the regions OECD and Asia, we find evidence of an inverse U-shaped relationship, often referred to as an environmental Kuznets curve (EKC). For OECD, the EKC-shape disappears when using consumption-based emissions data, suggesting the EKC-shape observed for OECD is driven by emissions exports. For Asia, the EKC-shape becomes even more pronounced when using consumption-based emissions data and exhibits an earlier turning point.
Original languageEnglish
Place of publicationAarhus
PublisherÅrhus Universitet
Number of pages65
Publication statusPublished - May 2022
SeriesCREATES Research Paper
Number2022-09

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