Title: Environmental Kuznets curve for CO2 emissions - an ARDL-based approach for an emerging market

Authors: Hind Lebdaoui; Maroua El Asri; Youssef Chetioui

Addresses: School of Business Administration, Al Akhawayn University in Ifrane, Morocco ' School of Business Administration, Al Akhawayn University in Ifrane, Morocco ' School of Business Administration, Al Akhawayn University in Ifrane, Morocco

Abstract: This paper empirically examines the relationships between CO2 emissions, energy consumption, inward foreign direct investment and economic growth in Morocco between 1970 and 2018. The environmental Kuznets curve (EKC) hypothesis is assessed, and the autoregressive distributed lags (ARDL) bound and vector error correction method (VECM) are used to examine the posited relationships in an emerging market, where authorities give more importance to economic growth than environmental concerns. Our results suggest the existence of an inverted U-shaped relationship between CO2 emissions and economic growth. Furthermore, the VECM-based Granger causality illustrates the existence of a bi-directional causality between CO2 emissions and economic growth in the long-run, and a uni-directional causality from CO2 emissions to FDI in the short run. In spite of the gradual switch toward a green economy, further attention is to be directed to alternative sources such as wind, solar, and hydropower in order to maintain a sustainable growth.

Keywords: ARDL model; carbon dioxide emission; economic growth; fossil energy consumption; inward FDI; emerging market.

DOI: 10.1504/IER.2021.121658

Interdisciplinary Environmental Review, 2021 Vol.21 No.3/4, pp.269 - 289

Received: 02 Mar 2021
Accepted: 08 Jun 2021

Published online: 23 Mar 2022 *

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