Do agriculture activities matter for environmental Kuznets curve in the Next Eleven countries?

While the agricultural sector contributes the economic growth, it also induces GHGs and causes environmental degradation. The effect of agriculture activities on environmental degradation receives attention last several years in environmental Kuznets curve (EKC) literature. The aim of this paper is to investigate the effect of agriculture activities (AGRI), energy consumption (EC), foreign direct investment (FDI), and trade openness (TO) on CO2 in the context of EKC hypothesis for the Next Eleven countries in the period of 1991-2019. For this purpose, we employ common correlated effects mean group estimator (CCEMG) to obtain panel and country-specific results. In addition, Dumitrescu-Hurlin panel causality test is used to examine the pairwise causal relationship between variables. The results show that the EKC hypothesis, the inverted U-shape relationship between CO2 and GDP, is valid for Bangladesh, Mexico, Nigeria, Turkey, and the panel. FDI has significantly positive association with CO2 for South Korea and the panel. TO has significantly negative association with CO2 for Bangladesh, Indonesia, Mexico, and the panel but significantly positive relationship with CO2 in Philippines. Moreover, the focus variable AGRI has significantly negative association with CO2 for Bangladesh, Turkey, and the panel but significantly positive relationship with CO2 for Mexico.

Automated summary

This paper investigates the impact of agricultural activities, energy consumption, foreign direct investment, and trade openness on CO2 emissions, finding significant positive or negative associations in certain countries.