Essays on the Energy Sector and the Environmental Kuznets Curve Hypothesis: Macro and Micro perspectives

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The intended research will test whether the Environmental Kuznets Curve (EKC) hypothesis empirically holds for a wide range of environmental indicators linked to the energy sector both at the macro and micro levels by using novel methodological approaches and the most recent datasets. The EKC theory postulates that environmental degradation increases as income goes up and starts declining after a certain income threshold is reached. Put another way, there should be an inverted U-shaped relationship between environmental pressure and income indicators. Based on three essays, the intended research work will: (i) update findings from previous studies with the most recent data; (ii) examine past research findings in the light of more recent empirical strategies; (iii) allow comparisons between empirical frameworks using the same data to see which ones generate more or less favourable estimates; (iv) use a novel strategy combining long-term growth rates, IV and quantile approaches in the first essay. This will address the major econometric problems faced by models used in the literature;(v) determine which factors explain the existence of an EKC for some countries and the level of the turning point by using a maximum likelihood approach in the second essay. The channels examined will include the availability of clean technologies, good institutions, environmental values within the population and the implementation of energy policies; (vi) explore a direct channel that theoretically explains the EKC shape by examining micro-evidence in the housing sector in different countries. In particular, we will try to investigate whether the relationship between income and energy consumption at the household level is the same in every country. We will also examine the extent to which the level of energy consumption is induced by direct individual decisions or from indirect channels resulting from the nature of housing units and the goods consumed.