Climbing the electricity ladder generates carbon Kuznets curve downturns

Abstract

This paper examines why some countries have experienced environmental Kuznets curve (EKC)-type reductions in carbon dioxide (CO2) emissions, while others have not. The hypothesis that climbing to the upper rungs of the electricity ladder (nuclear power and modern renewables) has been a primary mechanism via which countries have achieved substantial reductions in per capita CO2 emissions is tested using a binary dependent variable modelling approach for a sample of 105 countries. The findings suggest that electricity mix transitions are indeed a primary determinant of carbon Kuznets curve downturns. Because such transitions are facilitated by long-run growth in per capita incomes, they are an important mechanism via which an EKC effect for CO2 has emerged. The paper explores additional mechanisms via which carbon Kuznets curves may have been generated, but the results indicate that these are of less importance than the electricity mix effect. The evidence also suggests that countries with larger fossil fuel endowments are less likely to experience carbon Kuznets curve downturns, an additional curse of natural resources. Show more