Environmental Kuznets Curves for GHGs and Air Pollutants in Italy. Evidence from Sector Environmental Accounts and Provincial Data

This paper provides new empirical evidence on delinking and Environmental Kuznets Curves (EKCs) for greenhouse gases and air pollutant emissions in Italy. Two panel datasets, sectoral disaggregated National Accounts Matrix including Environmental Accounts (NAMEA) and geographically disaggregated emissions at provincial level, are analyzed. These highly disaggregated datasets provide a very large heterogeneity and can help to overcome the shortcomings of the usual approach to EKC based on cross-country data. We find mixed evidence supporting the EKC hypothesis. The analysis of NAMEA-based data shows that some of the emissions, such as two greenhouse gases (CO2 and CH4,) and CO, produce inverted-U shaped curves with coherent within range turning points. Other pollutants (SOX, NOX, and PM10) show monotonic or even N shaped relationship. Evidence also highlights that the aggregated outcome should hide some heterogeneity. In fact, services tend to present an inverted-N shape in most cases. Manufacturing industry shows a mix of inverted-U and N shapes, depending on the emission considered. The same applies to total industry (not only manufacturing): though a turning point has been experienced. N shapes may be important in a policy perspective as the may lead to increased emissions with respect to very high levels of the income driver. The analysis of provincial data shows that inverted-U relationships are present for some of the emissions, such as CH4, NMVOC, CO and PM10, with coherent within-range turning points. Other emission trends show a monotonic relationship (CO2 and N2O), or in some cases an inverted-N shaped relationship (SOX and NOX). In general, EKC evidence is more pronounced for GHGs. Nevertheless, taken jointly, the two analyses suggest that delinking is primarily driven by industrial activities, with private transport and household activities confirming a lower efficiency in environmental terms. Such conclusions may provide interesting suggestions for policy making.