RELATIONSHIP AMONG URBANIZATION, ECONOMIC GROWTH, ENERGY INTENSITY, AND CO2 EMISSION IN UPPER-MIDDLE INCOME COUNTRIES

Abstract

This study examines how urbanization affected CO₂ emissions in selected 24 upper-middle income countries between 1990 and 2014. It contributes to the literature by investigating the nonlinear impact of urbanization while accounting for dynamics of cross-sectional dependency within the sample. By taking advantage of the Stochastic Impacts by Regression on Population, Affluence, and Technology (STIRPAT) and the Environmental Kuznet Curve (EKC) hypothesis and balanced panel data technique ecological modernization theory has been empirically proved. The evidence showed that, except for a small part of the countries belonging to the sample (Mauritius, Guatemala, Indonesia, China, Azerbaijan, and North Macedonia), the urbanization levels they reached within the analyzed period have already tended to reduce carbon dioxide. Apart from this, economic growth, population, and technology elasticities of carbon emission are positive, that is, in harmony with the existing STIRPAT model literature. The evidence in this article can provide a guide for policymakers and urban planners in upper-middle income countries for all steps to be taken to prevent climate change.