Environmental Kuznets Curve in Romania and the Role of Energy Consumption

The aim of present study is to probe the dynamic relationship between economic growth, energy consumption and CO2 emissions for period of 1980-2010 in case of Romania. In doing so, ARDL bounds testing approach is applied to investigate the long run cointegration between these variables. Our results confirm long run relationship between economic growth, energy consumption and energy pollutants. The empirical evidence reveals that Environmental Kuznets curve (EKC) is found both in long-and-short runs in Romania. Further, energy consumption is major contributor to energy pollutants. Democratic regime shows her significant contribution to decline CO2 emissions through effective implementation of economic policies and financial development improves environment i.e. reduces CO2 emissions by redirecting the resources to environment friendly projects.