Reassessing the environmental Kuznets curve: a multidimensional analysis of air pollution indices and economic development in ASEM
Woraphon Yamaka, Yirong Bai, Paravee ManeejukPurpose
This study aims to examine how different dimensions of economic development influence air pollution across countries at varying stages of development. Focusing on Asia–Europe Meeting economies, it reassesses the Environmental Kuznets Curve (EKC) hypothesis by distinguishing between global pollutants (CO2 emissions and total greenhouse gases) and local air pollution (PM2.5), while accounting for financial development, structural change and urbanization.
Design/methodology/approach
The study applies a dynamic panel kink regression framework combined with system generalized method of moments estimation to capture nonlinear and regime-dependent relationships between development indicators and air pollution. Dynamic specifications address emission persistence and endogeneity, while kink points are endogenously estimated to identify development-stage-specific effects.
Findings
The results reveal marked heterogeneity across pollutants and development dimensions. Income growth does not exhibit an inverted-U relationship with CO2 emissions or total greenhouse gases, suggesting the absence of an EKC for global pollutants. In contrast, PM2.5 concentrations display an inverted-U pattern, indicating that local air pollution can be reduced beyond certain development thresholds. Financial development and urbanization initially intensify pollution but are associated with improved air quality at higher development stages, whereas economic tertiarization consistently contributes to pollution reduction.
Originality/value
This study extends the EKC literature by jointly analyzing multiple air pollutants and multiple dimensions of economic development within a nonlinear dynamic panel framework. By endogenously identifying development-stage-specific regimes, it shows that nonlinear pollution–development relationships depend on both pollutant type and the dimension of development considered.