The economic growth/development and environmental degradation: evidence from the US state-level EKC hypothesis

This study investigates the validity of the EKC (environmental Kuznets curve) hypothesis for the 50 US states and a Federal District (Washington, D.C.). To this aim, the common correlated effects (CCE) and the augmented mean group (AMG) estimation procedures are applied between 1980 and 2015. While the CCE estimation does not support EKC hypothesis, the AMG does. The empirical findings of the AMG estimation indicate that only 14 states verify the EKC hypothesis. Additionally, the expected negative impacts of fossil energy consumption on the environment (CO2 emissions) are strongly detected in all states except Texas. However, the expected positive impacts of renewable energy consumption on the CO2 emissions are detected only in 13 states. Furthermore, the expected negative impacts of the population are not detected in some mostly populated states like New York, Texas, and Ohio. The overall findings of this study may help the US state-level policy makers in two ways: first, to understand whether their economic growths are sustainable (eco-friendly); second, to see how their fossil and renewable energy consumptions affect their environments and to review their energy policies.