The environmental Kuznets curve, based on the economic complexity, and the pollution haven hypothesis in PIIGS countries

• Published in: Renewable energy Vol. 185; pp. 1441 - 1455
• Main Authors: Balsalobre-Lorente, Daniel, Ibáñez-Luzón, Lucia, Usman, Muhammad, Shahbaz, Muhammad
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.02.2022
• Subjects: Carbon emissions; Economic complexity; PIIGS countries; Pollution haven hypothesis; Renewable energy; Urbanization; Urbanization; Economic complexity; Renewable energy; Pollution haven hypothesis; PIIGS countries; Carbon emissions
• ISSN: 0960-1481; 1879-0682
• DOI: 10.1016/j.renene.2021.10.059

This study extends the debate on environmental performance in PIIGS countries by examining the dynamic association between economic complexity, foreign direct investment, renewable energy, urbanization process, and carbon emissions from1990–2019. The dynamic ordinary least square (DOLS) estimator is applied for empirical analysis. The empirical evidence reveals the association between economic complexity and CO2 emissions is inverted-U and further N-shaped relationship. This confirms the presence of environmental Kuznets curve (EKC) hypotheses in the region. The empirical results also authenticate the pollution haven hypothesis since high FDI is the culprit to increase environmental degradation in the PIIGS economies. The participation of renewable energy is found to inhibit CO2 emissions. Urbanization process exerts huge pressure on environmental quality. Finally, the findings of Dumitrescu-Hurlin causality test explores a bidirectional causal link between economic complexity and CO2 emissions. These findings advocate policymakers to propose comprehensive energy and economic policies by targeting cleaner production exercises, not only for environmental quality but also to accomplish the objectives of 17 sustainable development goals targets. •The empirical evidence reveals the association between economic complexity and CO2 emissions in PIIGS countries.•The environmental Kuznets curve and Pollution heaven hypotheses are validated in PIIGS countries.•Renewable energy inhibits CO2 emissions in PIIGS countries.•Urbanization exerts huge pressure on environmental quality in the PIIGS countries.•Unidirectional causality link is discovered from renewable energy to CO2 emissions.