An Empirical Investigation of the Environmental Kuznets Curve in the Context of Developing Nations

SHANU S

doi:10.36948/ijfmr.2025.v07i06.63449

An Empirical Investigation of the Environmental Kuznets Curve in the Context of Developing Nations

Author(s)	Dr. SHANU S
Country	India
Abstract	Environmental economics has been focusing on the nexus between economic development and environmental degradation especially in the case of the developing world where industrialization is accelerating, energy dependence, and poor regulation systems lead to increased ecological stresses. This research explores the relevance of the Environmental Kuznets Curve (EKC) hypothesis in the sample of developing states such as BRICS, South Asia, and Sub-Saharan Africa in 1990-2022. The first aim is to test the existence of an inverted U-shaped relationship between the per capita income and CO2 emissions, and to test the moderating impacts of trade openness, use of renewable energy, and institutional quality. This study offers a fresh addition to the current literature on EKC, as it compares and contrasts the EKC in different developing areas, using a dynamic panel data model built out of System GMM, which handles endogeneity and both short- and long-run implications. The empirical data validates existence of the EKC, which states that emissions first increase with income but then decreases beyond a certain point, whereas trade openness, use of renewable energy, and effective institutions play a significant role in reducing environmental degradation. The results indicate that not only a higher level of income is necessary in developing countries to sustain economic growth, but active policy-making and sound governance are also needed. The research has a contribution to the literature in the sense that it emphasizes the important role of structural and institutional aspect in determining the growth-environment nexus and it offers evidence-based information to the policy specialists who want to develop a balance between development and environmental sustainability.
Keywords	Environmental Kuznets Curve, Developing Nations, CO₂ Emissions, System GMM, Renewable Energy, Institutional Quality, Trade Openness, Sustainable Development
Field	Arts
Published In	Volume 7, Issue 6, November-December 2025
Published On	2025-12-14
DOI	https://doi.org/10.36948/ijfmr.2025.v07i06.63449

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An Empirical Investigation of the Environmental Kuznets Curve in the Context of Developing Nations

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