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The role of government spending within the environmental Kuznets curve framework: evidence from G7 countries.
- Source :
- Environmental Science & Pollution Research; Jul2023, Vol. 30 Issue 34, p81513-81530, 18p
- Publication Year :
- 2023
-
Abstract
- This study assesses the role of government spending on environmental sustainability based on a framework that combines the environmental Kuznets curve (EKC) hypothesis with the Armey curve hypothesis. Specifically, the inverted U-shaped relationships between carbon (CO<subscript>2</subscript>) emissions and economic growth (EKC hypothesis) and between government spending and economic growth (Armey curve hypothesis) are analyzed using a composite EKC model tested for cross-sectional dependence and heterogeneity, panel unit root, panel co-integration, and the augmented mean group estimation. In so doing, this study pursues a potential transmission mechanism leading from government spending to CO<subscript>2</subscript> emissions through the growth channel and presents a novel way to develop a better understanding of how economic growth policy and energy policy can be synchronized. Empirical results show that economic growth acts as a transmitter between government spending and CO<subscript>2</subscript> emissions in the USA, UK, and Canada. However, the composite EKC hypotehesis is confirmed only for the USA and Canada, where the optimal level of government spending that maximizes CO<subscript>2</subscript> emissions is 29.87% and 29.22% of GDP, respectively. In contrast, the optimal level of government spending equivalent to 28.30% of GDP minimizes CO<subscript>2</subscript> emissions in the UK. The key policy implication is that governments can achieve sustainable economic growth by setting standards for their spending levels. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 09441344
- Volume :
- 30
- Issue :
- 34
- Database :
- Complementary Index
- Journal :
- Environmental Science & Pollution Research
- Publication Type :
- Academic Journal
- Accession number :
- 164944879
- Full Text :
- https://doi.org/10.1007/s11356-023-25180-9