Revisiting the environmental Kuznets Curve hypothesis : a dynamic panel VAR analysis

This study is based on a balanced panel of pollutants (CO2, SO2 and NOx emissions per capita) drawn from the electricity sector of 51 US regions covering the period 1990-2012. The empirical findings indicate strong evidence of non-linear cointegrated relationships between local (SO2 and NOX) and global (CO2) emissions generated in the electricity sector with the level of economic growth. The dynamic Panel-VAR results using impulse response functions and variance decomposition support the validity of these findings further. These results call for the need to strengthen the effectiveness of environmental degradation policies by ensuring the sustainability of the electricity sector to drastically reduce global and local pollutants.