An Environmental Kuznets Curve for N₂O emissions in Germany: an ARDL approach

This paper analyses the relationship between nitrous oxide (N₂O) emissions, economic growth, agricultural land used and exports in Germany. We use time-series data between 1970 and 2012 and the Autoregressive Distributed Lag (ARDL) methodology to test for cointegration in the long run. Results show that there is a quadratic long run relationship between N₂O emissions and economic growth, confirming the existence of an Environmental Kuznets Curve (EKC) for Germany. Agricultural land area affects N₂O emissions positively, whereas exports affect emissions negatively. The turning point is $27,880, which is within the sample and implies that Germany is in the decreasing part of the curve of environmental degradation. The paper shows that, contrary to testing the EKC in less developed countries, mitigation of N₂O emissions does not negatively affect growth in Germany. As such, it is feasible to undertake any conservative policy in order to reduce emissions without major consequences on economic sectors.