Study of the Relationship between Economic Growth and Greenhouse Gas Emissions of the Shanghai Cooperation Organization Countries on the Basis of the Environmental Kuznets Curve

Abstract

The present study contributes to the ongoing debate on environmental sustainability and the low-carbon agenda in terms of an analysis of a relatively new international association, the Shanghai Cooperation Organization (SCO). Based on panel data from SCO countries from 2000 to 2020, the hypothesis of the existence of the Environmental Kuznets Curve (EKC) was tested. The results showed the validity of the EKC hypothesis for the SCO countries; in particular, the gross domestic product and natural resource rents have a connection with greenhouse gas (GHG) emissions, while trade openness, foreign direct investment and the use of renewable energy sources reduce GHG emissions in the long term. It was also found that the effect of economic growth on GHG emissions in the long term in the SCO countries has the form of an inverse N-curve. Based on the analysis performed, recommendations are offered to improve energy policy in the field of alternative energy sources, natural resources—rents on them, openness to foreign markets and attracting foreign investment.