The Environmental Kuznets Curve Under Norden “Green Deal” and Action Plans in Nordic European Countries

This article assesses the path of environmental degradation under the environmental Kuznets curve framework in Nordic European countries using data spanning the period 2005–2019 and employing the ordinary least squares techniques. The findings reveal evidence of a U-shaped structure; meaning, economic growth during the study period under the Norden “Green Deal and Action Plans” impulse remains on a pathway in which environmental quality is not yet improved. Further, there is no leveraging effect that changes the U-shaped structure into and inverted U-shaped. However, Nordic countries are characterized by the existence of the Pollution Halo Effect. Indeed, foreign direct investment inflows lead to increase use of advanced technologies and improved management practices. These results are robust to the use of different techniques such as alternative dependent variables, addition of control variables in response of the likely attrition bias, test of non-belonging to Eurozone features, and quantile analysis. As policy implications, Nordic European countries should amplify environmental management practices and policies to achieve low carbon footprint production or consumption in their economies, as well as pursue on a long-term basis, initiatives for a Green Nordic label, and energy efficiency as settled in the Norden Environmental Action Plan.