The analysis of the validity of Environmental Kuznets Curve of the EU member states

Abstract

The paper analyses a common Environmental Kuznets Curve (EKC) relationship between greenhouse gases (GHG) and gross domestic product (GDP). The EKC indicates that, at the early stages of economic growth, pollution increases with the growing use of resources, but when a certain level of income per capita is reached, the trend reverses so that, at a higher development stage, further economic growth leads to the improvement of the environment. In the article the validity of the reduced-form EKC for twenty European Union states for the period 1995–2011 is determined. The fixed effect panel model is used. The research results may be useful for the climate change policy design.