Methane Emissions and Economic Growth : An N-shaped Environmental Kuznets Curve for the G20 countries?

Sammanfattning

The climate crisis is one of the most challenging problems facing the earth’s population right now. Emissions of greenhouse gases is the major reason for global warming and a lot of attention has been directed to carbon dioxide emissions and its impact on the environment. However, methane is a much stronger greenhouse gas but does not get as much focus as needed. This study investigates the relationship between methane emissions and economic growth with panel data from the G20 countries for the time period 1992-2018. The aim is to find evidence for an N-shaped Environmental Kuznets Curve (EKC) for the data sample and explore how various explanatory variables like energy consumption and natural gas consumption affect methane emissions. The main results from the Fixed Effects Regression Model (FEM) revealed evidence for an N-shaped EKC. Further, total energy consumption was found to have a positive impact on methane emissions, but no statistically significant estimator was found for natural gas consumption. The key takeaway from this study is that solely economic growth will not solve the problem with global warming, according to the N-shaped form of the EKC. Policymakers need to act and, for example, implement new environmental regulations and create incentives for actors in society to mitigate methane emissions.