Environmental Kuznets Curve: Evidence from the Nordic Countries 1961-2010

Abstract: The relationship between economic growth and the environment, based on the theory of the Environmental Kuznets Curve (EKC), has been a topic of controversies, and a considerable number of studies have been devoted to investigate such relationship. In the current research the validity of EKC theory is tested on the Nordic countries, namely, Sweden, Denmark, Norway and Finland, over the period 1961 to 2010, taking the carbon dioxide emissions as a proxy of environmental degradation. The results of fixed effects on panel data showed that these countries’ growth and emission pattern are rather ambiguous, and there is no clear support of the EKC theory when taking the low significance level of the obtained coefficients into consideration. Nevertheless, the production of clean energy has been proved to have a negative effect on emissions.