Alternative exploration of EKC for \(\hbox {CO}_{2}\) emissions: inclusion of meta-technical ratio in quantile regression model

This study develops an innovated model of quantile regression model to portray a delicate relationship between per capita income and \(\hbox {CO}_{2}\) emission. The inclusion of the indicator of meta-technical ratio, generated from the directional distance function, not only transforms the underlying unobservable technology heterogeneity cross different individual unit and time span but also captures the marginal impacts of technology heterogeneity on specific percentiles of the conditional distribution for panel-type of data. This proposed model is applied to investigate the environmental Kuznets curve (EKC) for 104 countries worldwide during years 1990–2005. The results show that income elasticities of \(\hbox {CO}_{2}\) emission computed from the developed quantile regression estimation results for upper-middle, low-middle, and low income countries are positive in all quantiles. The inversed-U shaped EKC between annual \(\hbox {CO}_{2}\) emission per capita and annual GDP per capita exist for high percentiles of high income countries. The time effect and country effect elasticities of \(\hbox {CO}_{2}\) emission are positive in most quantiles. The negative values of \(\hbox {income-CO}_{2}\) elasticities reveal that the inversed-U shape EKC relationships exist for countries, such as Germany, United Kindgom, and Japan.