Production and consumption-based approaches for the Environmental Kuznets Curve in Latin America using Ecological Footprint

In this paper we examine the Environmental Kuznets Curve (EKC) hypothesis using the Ecological Footprint (EF), a more comprehensive indicator of environmental degradation, for ve Latin American countries covering the 1971-2007 period. We test the EKC hypothesis using a traditional quadratic function from both the supply and consumption-side, adding several explicative variables: urbanization, petrol price and industrialization for supply-side; biocapacity, life expectancy and energy use for consumption-side. We perform an ARDL modeling in order to study both short and long-run periods. We nd that there is no stable relationship between environment and economic development in the long-run. For the short-run analysis, the EKC hypothesis is supported for no one, we rather nd an increasing relationship between growth and environment. Results for explicative variables are mixed: For production-side approach, industrialization appears to have a positive impact on EF for Chile. For consumption-side approach, we nd that energy use seems to have a positive impact on EF for Argentina and Colombia whereas biocapacity and life expectancy have a positive and negative impact, respectively, on EF for Paraguay.