Analysing Transportation-Induced Economic Growth, Energy Use, and CO2 Emissions: An Empirical Investigation From EU Countries

Analysing Transportation-Induced Economic Growth, Energy Use, and CO2 Emissions: An Empirical Investigation From EU Countries

Salih Kalayci (Bursa Technical University, Turkey)
DOI: 10.4018/978-1-7998-1397-2.ch007
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This chapter concentrates on the linkage among transportation, energy usage, GDP, and Co2 emissions in EU countries during the period 1970-2014 by analysing the EKC hypothesis. The data is derived from the World Bank's official website to point out environmental consciousness of EU countries by implementing panel data analysis. In this sense, the findings indicate that environmental consciousness is quite low for EU countries from 1970 to 1997. Besides, the environmental issues of EU countries are taken into account from 1997 to 2014. The findings of research demonstrate that their sensitiveness has risen significantly, which is consistent with the inverse-U shape of the EKC hypothesis from 1997 to 2014. Thus, these empirical results support the Kyoto protocol's political aims and goals. Furthermore, Johansen co-integration test is implemented to reveal the long-term linkage among economic growth, air transportation, carbon emissions, and energy usage.
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2. Literature Review

Many researchers have studied the widespread impact of carbon, and these models have found that the transportation sector is not decisive in determining carbon prices compared to other sectors. For example, the sectoral and financial impact of the American energy and security law has comprehensively analyzed energy information management. GHG emissions are projected to be reduced by 17% by 2020 by the US government; in 2050, it is aimed to decrease by 83%. The emission level in the transport sector was aimed to be reduced from 1% to 3.5% by 2020 and from 2.6% to 8.5% by 2030, mainly due to the fact that a large part of the total GHG emission in the US was realized in the transport sector (Rubin and Leiby, 2013).

Global energy consumption increased from 4676 million tons in 1973 to 8429 MTOE in 2008 and the share of the transportation sector increased from 23.1% in 1973 to 27.3% in 2008 all over the world. The main reason for this is the continuous increase in the quantity of vehicles and family income. On the other hand, carbon emissions from global carbon dioxide rose from 21 billion tons in 1990 to 29.4 billion tons in 2008. The transport sector contributed to 6.6 billion tons of CO2 emissions, which corresponds to 22.5% of total CO2 emissions in 2008 (Ghandoor, 2013).

In this sense, the EKC hypothesis verifies an inverted U-shape among environmental dirtiness and real income. Air pollution and GDP rise at the beginning, and, afterwards, the trend sizably reverses some level of income. Thus, environmental consciousness is increased at high income levels. The famous model was founded by Grossman and Krueger (1991). Afterwards, the theory was specified by Panayotou (1993) as the Environmental Kuznet Curve. Besides, the inverted U model designated in 1955 by Kuznets (1955) expresses that the injustice of the income distribution increases in the early terms of evolution and falls subsequently.

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