J Environ Manage. 2021 May 31;293:112890. doi: 10.1016/j.jenvman.2021.112890. Online ahead of print.
ABSTRACT
In reality, economic expansion cannot be paced-up enough. This account for a potential trade-off between income and environmental degradation that is expectedly feasible at a maximum level of income. On this note, the current study looked at the validity of income-environmental degradation (Environmental Kuznets Curve, EKC) hypothesis especially amidst risk to investment in the United States over the period 1984-2017. Considering that the burning of fossil fuels constitutes the largest source of Greenhouse gas (GHG) in the United States, this study employed energy carbon emissions as a proxy for environmental quality and as a dependent variable. While the study employed renewable energy production as additional explanatory variable, it implemented the Autoregressive Distributed Lag (ARDL) technique in addition to a set of cointegration techniques. Importantly, the study found that the EKC hypothesis is valid for the case of the United States but not without a non-significant trade-off of risk to investment. Additionally, renewable energy production exhibits a statistically significant and desirable impact on environmental quality in both the short and long-run. In general, the study posited that while environmental sustainability is achievable at maximum level of income, it is likely attainable at the detriment of risk to investment. Hence, this observation should trigger a potential policy mechanism that minimizes risk to investment in light of the attainment of the country’s sustainable development goals (SDGs).
PMID:34082348 | DOI:10.1016/j.jenvman.2021.112890