Testing Greenhouse Gasses in Slovakia for Environmental Kuznets Curve and Pollution Haven Hypothesis

The analytical focus in this paper is to determine the tenability of two theoretical concepts of environmental economics in the Slovak Republic: the hypothesis of the environmental Kuznets curve and the hypothesis of Slovakia as a pollution haven. We have chosen to focus on a few selected sources of environmental pollution in the Slovak Republic, specifically greenhouse gas emissions. First we examine the hypothesis of the environmental Kuznets curves in connection with selected greenhouse gas emissions in the Slovak Republic from the years 1993-2011. Next we analyze the possible causal relationship between the net inflows of foreign direct investment and the volume of selected greenhouse gas emissions in the Slovak Republic. The existence of an environmental Kuznets curve was not confirmed. It is also possible to make the same conclusion in the relationships of carbon dioxide, nitrous oxide, and per fluorocarbons emissions and economic growth (GDP per capita). Only in the case of methane was neither a linear nor a cubic relationship confirmed between the variables of interest. A quadratic relationship was confirmed suggesting that this is the only type of greenhouse gas where estimates indicate a relationship which follows an environmental Kuznets curve. Based on the calculated values of the Granger causality test we conclude that the volume of greenhouse gas emissions per capita in the present period and in any of the previous four periods has no effect on the amount of net FDI inflows as a percentage of GDP in the Slovak Republic