Pollution and economic growth: Evidence from Central and Eastern European countries

• Published in: Energy economics 2019-06, Vol.81, p.1121-1131
• Main Authors: Lazăr, Dorina, Minea, Alexandru, Purcel, Alexandra-Anca
• Format: Article
• Language: English
• Subjects: Carbon dioxide; Carbon dioxide emissions; Central and Eastern European countries; CO2 emissions; Economic development; Economic growth; Economic models; Economics and Finance; Energy economics; Environmental Kuznets curve; Environmental policy; Environmental studies; GDP; Gross Domestic Product; Humanities and Social Sciences; Methods and statistics; Policy making; Pollution; Pollution control
• ISSN: 0140-9883; 1873-6181
• DOI: 10.1016/j.eneco.2019.05.011

We investigate the relationships between pollution and growth in eleven Central and Eastern European (CEE) countries. Aggregate results, robust to different estimators and control variables, reveal an increasing nonlinear link between GDP and CO2 for the group of CEE countries. However, at a disaggregated, country-level, the relationship between GDP and CO2 is characterized by much diversity among CEE countries, namely: N-shaped, inverted-N, U-shaped, inverted-U, monotonic, or no statistical link. Thus, despite an aggregated upward trend, some CEE countries managed to secure both higher GDP and lower CO2 emissions. From a policy perspective, EU policymakers could pay more attention to these countries, and amend the current unique environmental policy to account for country-heterogeneities in order to support economic growth without damaging the environment. •We look at the link between pollution and growth in CEE countries.•Aggregate results reveal an increasing nonlinear link between GDP and CO2.•However, country-level results unveil much diversity in the relationship GDP-CO2.•Such country-heterogeneities should be accounted for by EU environmental policies.