Determinants of CO 2 emissions in the MERCOSUR: the role of economic growth, and renewable and non-renewable energy

Abstract

The main objective of this study was to analyze the impact of energy consumption (divided into renewable and non-renewable sources) and income on CO₂ emissions within the environmental Kuznets curve (EKC) model for the Southern Common Market (MERCOSUR). To do so, the annual panel data collected during the 1990–2014 periods was used. The CO₂ variable, representing carbon dioxide emissions in metric tons per capita, was used as a proxy for the emission of pollutants. The annual data were obtained from the World Bank (World Development Indicators). The sample consisted of the five MERCOSUR member countries: Argentina, Brazil, Paraguay, Uruguay, and Venezuela, comprising a period of 25 consecutive years. The results showed that energy consumption from renewable sources had a negative impact on CO₂ emissions, while the energy consumption from non-renewable sources had a positive impact. The positive impact of economic development on CO₂ emissions was also seen. In addition, this study supports the validity of the EKC hypothesis for the MERCOSUR because GDP (real output) leads to environmental degradation while GDP² reduces the level of gas emissions.

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