Investigating the effect of economic factors on environmental degradation using the 3SLS panel approach (Selection of Developing and Developed Countries)

Subject Areas : Environmental Economics

shima parsa ¹ ( M.Sc. Agricultural Economics, Shahid Bahnar University of Kerman, Kerman, Iran. )
mohammadreza zare mehrjerdi ² ( Associate Professor, Department of Agricultural Economics, Shahid Bahnar University of Kerman, Kerman, Iran. * (Corresponding Author) )
maryam ziaabadi ³ ( Assistant Professor of Tourism, Bam Higher Education Complex, Bam, Iran . )
hossein mehrabi boshrabadi ⁴ ( Professor of Agricultural Economics, Shahid Bahonar University of Kerman, Kerman, Iran. )

Received: 2020-02-09 Accepted : 2021-06-28 Published : 2021-11-22

Keywords: Ecological footprint, Environmental Kuznets Curve, Energy consumption, Economic growth,

Abstract :

Background and Objective: Following the increase in environmental pollution caused by economic growth, environmental challenges have become one of the most important concerns of policy makers. Because environmental pollution leads to adverse environmental effects such as climate change and global warming, and ultimately threatens human life and ecosystem destruction. Therefore, studying the impact of factors affecting environmental degradation is of particular importance. Material and Methodology: This study intends to analyze the impact of economic factors affecting environmental degradation during the period 1995-1995, using time series data from 26 selected developing countries and 17 selected developed countries. Therefore, in order to investigate the existence of the Kuznets environmental curve in the studied countries, the coefficients of the variables in the three equations of ecological footprint, energy consumption and economic growth have been estimated by the system of equations simultaneously with panel data (panel 3sls). Because in this method, due to the simultaneous estimation of the equations, the estimated coefficients have a higher accuracy. Finding: The results of estimating the coefficients of the model using the three-stage least squares technique with panel data indicate that the existence of the Kuznets environmental hypothesis in developed countries cannot be confirmed because the coefficients of GDP and squares are negative and positive, respectively. But, in developing countries, the coefficients of GDP and squared variables have been positive and negative, respectively, which confirms the existence of the Kuznets environmental hypothesis in these countries. Discussion and Conclusion: According to the results, the variable of energy consumption in both developed and developing countries has a positive and significant effect on environmental degradation, while the variable of trade openness in developing and developed countries has a negative and significant effect on pollution and ecological footprint. Therefore, it is suggested that due to the high importance of the environment, along with planning and policy-making for higher economic growth, the enactment of environmental laws and the use of environmentally friendly technologies should be considered.

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