Assessment on the Applicability of Environmental Kuznets Curve Hypothesis on the Macroeconomic Factors Driving Carbon Dioxide Emissions in the Philippines

Abstract

Since there is a lack of empirical literature in the Philippines that focuses on studying the validity of the Environmental Kuznets Curve Hypothesis, this study aims to build on succeeding studies testing the validity of the EKC hypothesis in the country. In the current study, we empirically investigate the long-run relationship between the annual Philippine Carbon Dioxide (CO2) emissions as the proxy variable for Environmental Degradation, Gross Domestic Product per capita, net inflows of Foreign Direct Investment, Renewable Energy per capita, specifically for the period of 1981 - 2019. This paper also observed the Johansen Cointegration results in critically assessing whether the variables were conclusive to test in the long-run measure. For that reason, we investigated the validity of the EKC hypothesis by utilizing the ARDL long bound approach. Thus, our results revealed that a long-run relationship exists, but interestingly, the Environmental Kuznets Curve Hypothesis does not exist in the Philippines.