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Full Title: Nexus between Co2 Emissions and Economic Growth in France
Funding Information:
Abstract: The objective of this paper is to examine the relationship between carbon dioxide
(CO2) emissions and real Gross Domestic Product (GDP) in France by applying a
threshold effect model (TAR). This method is more general than the standard methods
based on the dichotomy between stationary and non-stationary series, and it allows to
identify critical thresholds in the relationship between income and CO2 emissions.
Indeed, this technique will generate different dynamics depending on the phase of the
cycle of the variables. The results reveal two optimal income thresholds. Indeed, when
GDP per capita remains below the first threshold (3293.47 US dollars), economic
activity positively affects environmental degradation, but when GDP per capita
oscillates between the two thresholds (3293.47 and 3878.09 US dollars), this elasticity
becomes increasingly weak. But when GDP per capita exceeds the second threshold
(US$3878.09), economic activity negatively affects CO2 emissions. This suggests the
need for environmental policies to reduce carbon dioxide emissions during periods of
economic growth.
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20 8 1.0
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CUSUM 5% Significance CUSUM of Squares 5% Significance
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32 Source : Author from Eviews 12
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34 Finally, the tests of stability of the estimated model make it possible to confirm this. Indeed,
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36 the two versions of this test, namely the CUSUM, based on the cumulative sum of the recursive
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residuals, and the CUSUM SQ, based on the cumulative sum of the square of the recursive
39 residuals, are conclusive. On the graph the recursive residuals (in blue) are very close to zero,
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41 it is largely within the confidence interval (in red). We can therefore conclude that there is no
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43 instability of the parameters over time. Similarly, the graph shows that the solid line (blue)
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45 always remains between the two dotted lines (red), whatever the observation time, and the
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47 residual variance is stable at the 5% threshold.
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49 5. Conclusion
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52 The main objective of this study is to determine the effect of economic growth on environmental
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degradation in France. To achieve this general objective, we used a threshold autoregressive
55 model (TAR). Indeed, our study covers the period from 1970 to 2020.
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58 The results of the econometric estimations highlight the existence of a non-linear relationship
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60 between economic activity and CO2 emissions supported by Balsalobre-Lorente et al (2021).
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Thus, there would be two optimal thresholds of GDP per capita that would maximise
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2 environmental degradation. Thus, when the GDP per capita is lower than 3261.68 US dollars
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(Log GDPC=8.09US dollars), economic activity positively and significantly affects
5 environmental degradation with an elasticity equal to 2.57. However, when the GDP per capita
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7 is between 3261.68 and 3866.09 US dollars, the elasticity becomes increasingly low, at 1.08.
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9 On the other hand, when the GDP per capita is higher than 3866.09 US dollars (Log
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11 GDPC=8.26 US dollars), economic activity has a significant negative influence on carbon
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13 dioxide emissions. On the other hand, whatever the level of income per capita, urbanisation
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negatively and significantly affects carbon dioxide emission.
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17 These results reveal that, in the quest for national well-being, French economic agents tend to
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19 degrade the environment until they reach two levels of wealth before demanding a healthier
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21 environment. This has led to a tightening of standards and an improvement in the quality of the
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environment in some French cities, notably Paris. The Kuznets environmental curve hypothesis
24 for the French economy is therefore verified.
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27 This study contributes to the debate on the link between income and environment. In terms of
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29 policy implications, it would be important for policy makers to adopt economic development
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31 linked to environmental protection, investment in cleaner infrastructure, advancement in the
32 promotion of cleaner buildings, in order to decrease the direct pollution link between increasing
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34 urbanisation and the environmental degradation process.
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37 6. Declarations
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39 -Availability of data and materials
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42 The data used in this paper are taken from the World Bank Word Development Indicator
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44 database (2021) and cover the period 1970-2020. The econometric estimate was made on
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Eviews 12.
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48 -Competing interests
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Not applicable.
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53 -Funding
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56 Not applicable.
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58 -Authors' contributions
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This work aims to help the policy makers to adopt economic development linked to
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2 environmental protection, investment in cleaner infrastructure, advancement in the promotion
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of cleaner buildings, in order to decrease the direct pollution link between increasing
5 urbanisation and the environmental degradation process.
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8 -Acknowledgements
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we would like to thank Professor KEHO Yaya, who has always been present to provide precise
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12 remarks and solutions in the face of theoretical and/or empirical obstacles.
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15 -Authors' information (optional)
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17 This paper entitled " Nexus between Co2 Emissions and Economic Growth in France " is by
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19 Paul Vivien OYIBO, PhD student in Economics and Development at Alassane Ouattara
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21 University in Bouaké (Côte d’Ivoire). Email : oyibovivien@gmail.com
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APPENDIX
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2 Appendix 1 : Correlation matrix
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Appendix 3 : Estimation of the TAR model
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Appendix 4 : Threshold pecification
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Appendix 6 : Heteroscedasticity test
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12 Appendix 7 : Autocorrelation test
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24 Appendix 8 : Normality test
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27 Series: Residuals
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Mean -1.15e-14
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5 Median 0.001017
34 4 Maximum 0.091065
35 Minimum -0.098226
36 3 Std. Dev. 0.039117
37 2 Skewness -0.292578
38 Kurtosis 3.066122
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0 Jarque-Bera 0.736905
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42 Probability 0.691804
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