The Role of Energy Innovation and Corruption in Carbon Emissions: Evidence Based on the EKC Hypothesis
Daniel Balsalobre‐Lorentea✉, Muhammad Qaiser Shahbazb, Charbel José Chiappetta Jabbourc, Oana Madalina Drihad
- aDepartment of Political Economy and Public Finance, Economic and Business Statistics and Economic Policy, University of Castilla La Mancha, Cuenca, Spain
- bSchool of Management and Economics, Beijing Institute of Technology, Beijing, China
- cEnergy and Sustainable Development, Montpelier Business School, Montpelier, France
- dDepartment of Applied Economics, International Economy Institute, University of Alicante, Alicante, Spain
- ✉Corresponding author
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Abstract
This study investigates how energy innovations and corruption affect carbon emissions. To this end, a panel data model of 16 selected OECD countries is employed, spanning the period of 1995–2016. The empirical framework falls within the hypothesis of the environmental Kuznets curve (EKC), which explores the relationship between the economic growth and carbon emissions. The empirical results show that when economic systems interact with corruption, positive effects that energy innovations have on environmental quality are reduced. Furthermore, the amount of economic growth needed to limit environmental pollution levels is also distorted. Corruption seems to be pernicious for the environment in the long term, as it limits the stage at which decontamination occurs; i.e., corruption reduces the positive effect generated by measures focused on energy innovation in terms of reducing environmental pollution. These findings are expected to be significant in terms of implementing anti-corruption measures and effective environmental policies, and they call for appropriate policy measures that might limit the effects of corruption on environmental quality.