Fossil fuel share in the energy mix and economic growth

After the Paris Agreement in 2016 fossil fuel share in the energy mix has become a debatable issue within the policy-circles of different countries as they start rolling out their plans to meet the requirements and targets of the agreement. In this paper, we examine the relationship between fossil fuel share in the energy mix and real income using a panel of 151 countries from 1971 to 2013. A cursory examination of the data suggests that there may exist a polynomial relationship between fossil fuel share and income, a phenomenon that we coin as energy mix Kuznets curve (EMKC). Although our parametric estimates provide evidence in support of this hypothesis, the results are sensitive to polynomial model specification. The results from nonparametric analysis, which places no restrictions on the functional form, provide support in favor of the EMKC.