Environmental Kuznets Curve and the Pollution-Halo/Haven Hypotheses: An Investigation in Brazilian Municipalities

Author:

Polloni-Silva EduardoORCID,Ferraz DiogoORCID,Camioto Flávia de Castro,Rebelatto Daisy Aparecida do Nascimento,Moralles Herick Fernando

Abstract

There is much discussion on the non-linear relationship between economic growth and carbon dioxide (CO2) emissions. Additionally, the effects of Foreign Direct Investment (FDI) on the environment are ambiguous, as both beneficial (i.e., pollution-halo) and harmful (i.e., pollution-haven) effects were found. Therefore, the literature presents no consensus on either of these topics. This is especially problematic for developing regions, as these regions represent growing economies interested in receiving foreign investments, and their CO2-related research is limited. This study aims to understand the impacts of economic growth and FDI on the CO2 emissions of São Paulo state, Brazil. To perform this study, a unique dataset on regional FDI was built, and 592 municipalities were included. The analyses combine linear and non-linear estimations, and the results suggest a non-linear relationship between Gross Domestic Product (GDP) per capita and CO2 emissions, along with a negative association between FDI and CO2. Finally, this study discusses possible policy implications and contributes to the international literature.

Funder

Conselho Nacional de Desenvolvimento Científico e Tecnológico

Fundação de Amparo à Pesquisa do Estado de São Paulo

Publisher

MDPI AG

Subject

Management, Monitoring, Policy and Law,Renewable Energy, Sustainability and the Environment,Geography, Planning and Development

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