On the one hand, it is revealed that the status of environmental quality is influenced by the level of per capita income, which generate changes in environmental policies and legitimize the assumption that the higher is per capita income, the higher will be environmental deterioration. According to the literature insights, there are different types of approaches and different hypotheses related to the relationship between economic growth and environmental pollution. Year by year increase the concentration of carbon dioxide in the atmosphere and even if energy is a fundamental engine of economic development, the evolution of demand at different stages of economic development requires a viable solution for environmental problems. Emissions from human industry represent a key factor in climate change and exhibit one of the world’s most pressing challenges. Managing climate risks and facing up to losses and damages, implies societal decisions, proactive management, and the capacity to predict climate dynamics related to the future greenhouse gas emission and of course, to the entire pattern of socio-economic development and equality. The potential negative implication of climate change on economic activity is revealed by the climate risk which leads to adverse impacts on human livelihoods and well-being. Moreover, we find that the status of economic growth does not automatically diminish climate vulnerability in EU countries, only the correct type of growth does, thus being necessary that EU policymakers be aware of the energy cost pressure and to achieve economic growth in relationship with appropriate tools in terms of climate risk management.Ĭlimate change and environmental degradation influence the status of the sustainable economy, being affected both financial and non-financial institutions ( Haigh 2011 Sullivan 2014 Ozili, 2020).
The study also exhibits that higher income levels lead to increased demand for environmental protection and underline the need for designing environmental policies, capable to reduce emissions during periods of economic growth. The results suggest the existence of a long run cointegrating relationship between growth and CO 2 emissions in EU countries and the DOLS method indicates a statistically significant effect of economic growth on CO 2 emissions for both versions of estimators, revealing that on average, a 1% change in GDP leads to 0.072 change in CO 2 emissions. We use qualitative sequential methodology, involving empiric analysis that provides coherence and viability for our study, but also quantitative methods, including Dynamic Ordinary Least Squares (DOLS), unit root tests and cointegration techniques. This paper explores the dynamics of the relationship between economic growth and CO 2 emissions in the 27 EU member states in a panel setting for the period 2000–2017. Finance, Money and Public Administration Department, Faculty of Economics and Business Administration, Alexandru Ioan Cuza University of Iasi, Iași, Romania.Mihaela Onofrei Anca Florentina Vatamanu* Elena Cigu
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