Evidence of the Environmental Kuznets Curve: Unleashing the Opportunity of Industry 4.0 in Emerging Economies
2. Theoretical Background
2.1. Studies on the Relationship between the Economic Development and Environmental Degradation
2.2. Concept of Industry 4.0 and Sustainability Implications
3. Data and Methodology
- logCO2t—is the logarithm of CO2 emissions;
- logGDPt and log2GDPt—is the logarithm of GDP and its square;
- logFDIt—is the logarithm of FDI net inflows;
- logTradet—is the logarithm of trade in services (the sum of service exports and imports divided by the value of GDP);
- logEnergyt—is the logarithm of energy intensity level of primary energy;
- t—is the sampling year;
- ε—is the vector of the residuals;
- if β2 = β1 = 0, the hypothesis on the relationships between economic growth and environmental degradation can be rejected;
- if β2 = 0 and β1 > 0, there is a linear relationship;
- if β1 > 0 and β2 < 0, there is an inverted U-shaped relationship between economic growth and CO2 emission (in this case, the environmental Kuznets curve hypothesis can be accepted);
- if β1 < 0 and β2 > 0, there is a positive U-shaped relationship;
4.1. Regressions on Relationships between Carbon Emission and Economic Development
- H0: μ1 = μ2 = μ3
- H1: at least one of the means is different.
4.2. Income Elasticity of Environmental Degradation
4.3. Energy Intensity of GDP
4.4. Carbon Intensity of GDP
4.5. Level of CO2 Emissions
4.6. Investigation of the Relationship between ICT Use and Energy Consumption
5.1. Limitations and Recommendations
- energy saving and energy efficiency (attraction of FDI to unleash innovation potential of the industry);
- strategic reserves (harnessing the power of the energy sector, including renewables);
- import diversification (advanced supply chain transparency);
- integration into the EU energy area (connected and synchronized energy networks).
Conflicts of Interest
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|Dependent Variable: Log(CO2)|
|Included observations: 11|
|Sum of squared residuals (SSR)||1.13|
|Residual sum of squares (RSS)||0.05|
|Country||Average CO2 (Metric tons per Capita)||Average Real GDP per Capita (Current US$)||Income Elasticity of CO2|
|Region||Correlation Coefficients, Energy vs. ICT Indicators|
|Total Middle East||−0.79||0.92||0.99|
|Total Asia Pacific||−0.90||0.98||1.00|
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Koilo, V. Evidence of the Environmental Kuznets Curve: Unleashing the Opportunity of Industry 4.0 in Emerging Economies. J. Risk Financial Manag. 2019, 12, 122. https://doi.org/10.3390/jrfm12030122
Koilo V. Evidence of the Environmental Kuznets Curve: Unleashing the Opportunity of Industry 4.0 in Emerging Economies. Journal of Risk and Financial Management. 2019; 12(3):122. https://doi.org/10.3390/jrfm12030122Chicago/Turabian Style
Koilo, Viktoriia. 2019. "Evidence of the Environmental Kuznets Curve: Unleashing the Opportunity of Industry 4.0 in Emerging Economies" Journal of Risk and Financial Management 12, no. 3: 122. https://doi.org/10.3390/jrfm12030122