Examining the Behaviour of the Kuznets Curve Under Economic Policy Uncertainty Conditions Using the Stochastic Frontier Analysis: Evidence from 11 Selected Countries

This work aims to investigate and validate the Kuznets relationship between carbon dioxide emissions and economic drivers. More specifically, it considers Gross Domestic Product per capita, Transparency Corruption, Revenues from Natural Resources and Renewable Consumption under Economic Policy Uncertainty conditions for 11 countries in two groups, namely the G7 and BRIC, from 1997 to 2020. A stochastic frontier analysis was conducted to validate a functional translog for the environmental Kuznets curve (EKC), considering time-varying and time-invariant models. The results of the stochastic frontier show that for the EKC, the Inverted U Shape form is valid for the relationship between total resource rents and CO2 emissions per capita, and the relationship between EPU (uncertain economic policy) and CO2 emissions per capita, according to the results of the one frontier varying model. Regarding the influence of renewable energy consumption on CO2 emissions per capita, the Inverted U Shape form is validated according to the results of both of the two time-varying boundary models. Alternating with the U-shaped form, the relationship between the Corruption Index and the per capita CO2 emissions is validated according to both of the two time-varying models.