Relationship between CO2 Emissions and Economic Growth: A Panel Data Analysis across Countries over 2005-2010

Abstract

We know that CO₂ is one of the largest contributor to the greenhouse gas effect and is also a major source of pollutant and therefore harms the environment. It is therefore very important to study about the relationship between economic growth (GDP), foreign trade dependence and environmental pollution. It is also known that due to economic growth there are differences in CO₂ emission and a major determinant of CO₂ Emission is the level of energy consumption. We want to find out that if the environmental Kuznets curve (EKC) exists then where will a set of different (developed, developing) countries exist on it. In this paper we therefore, examine the relationship between CO₂ emission, energy consumption and economic growth for a set of different countries using annual data for the period 2005-2010.