Environmental Kuznets Curve and the Position of Slovakia and the Czech Republic in the European Union
Abstract
The aim of this article is to analyse the position of Slovakia and the Czech Republic in the European Union from the viewpoint of the Environmental Kuznets Curve (EKC) hypothesis. Econometric models for panel data with CO2 emissions as the dependent variable and four different types of macroeconomic aggregates are employed in the study.
The EU-27 data used in the study supports the hypothesis of the EKC. As the EU countries are heterogeneous, the countries are further classified into "rich" and "poor" (according to the level of their GDP), and further analyses are performed.
Considering the "rich" EU countries the EKC hypothesis holds, but if the "poor" EU countries are taken into account, the coefficient of the quadratic regressor is positive which relates to the traditional U-shaped curve, not the inverted one. Such a finding is still not in contradiction to the EKC hypothesis, as it assumes that at the low level of economic output, as the development progresses, the emissions increase.
The estimated value of the EKC turning point is 19 660 USD (constant 2000 USD) which has not been reached by the "poor" EU countries yet. As for the position of Slovakia and the Czech Republic in the EU, the results are not unambiguous.
The CO2 emissions have been decreasing very slightly in both countries since 1992 (with 1.33 percent mean annual rate of decrease in Slovakia and 1.16 percent mean annual rate of decrease in the Czech Republic). The GDP per unit of energy use (constant 2005 PPP USD per kg of oil equivalent) increased from 3.15 USD to 6.33 USD in Slovakia between 1990 and 2010 (i.e. 3.54 percent mean annual growth rate).
The mean annual growth rate of the Czech GDP per unit of energy use was slightly slower: 2.71 percent.