Investigation of the environmental Kuznets curve for consumption-based carbon dioxide emissions in Kenya: the role of renewable energy and globalization

Abstract

Enhancing environmental quality is regarded as a major concern globally. Fossil fuel energy utilization and economic growth are the main sources of environmental pollution. Hence, a paradigm shift from fossil fuels to cleaner energy is proposed. Hence, the objective of this study is to examine the validity of the environmental Kuznets curve (EKC) hypothesis in Kenya by controlling the effect of globalization and renewable energy. Contrary to previous attempts, this study utilized consumption-based carbon dioxide (CO2) emissions as an environmental pollution indicator. The autoregressive distributed lag (ARDL) technique and causality test are used with annual time series data spanning 1990-2018. The empirical results of the bound test revealed that globalization significantly enhances environmental quality, but renewable energy is insignificant in the long run. Economic growth impedes environmental quality, whereas squared growth boosts it. This result provides confirmatory evidence of the presence of the EKC hypothesis in Kenya. Besides, a unidirectional causality from consumption-based carbon emissions to economic growth, squared economic growth, and renewable energy is observed. The obtained findings underscore the need to prepare conducive environments that attract investments in clean energy sources, such as tax reductions and subsidies. Moreover, Kenya needs to enhance its involvement in the global commerce of commodities and services that exhibit minimal levels of greenhouse gas emissions.