Impact of agricultural land use and economic growth on nitrous oxide emissions: Evidence from developed and developing countries

Abstract

The environmental Kuznets curve (EKC) establishes a hypothetical link between economic growth and environmental degradation and has been tested empirically using various measures of pollution, including carbon dioxide (CO₂), methane (CH₄), and nitrous oxide (N₂O) emissions. However, few studies have focused on N₂O emissions, despite their projected lifetime of 114 years and 300 times greater warming potential than CO₂. Employing panel data for the period 1980 to 2012, this study uses the EKC to investigate N₂O emissions, including those resulting from agriculture, economic growth, agricultural land use, and exports. Two groups of data are extracted from the panel data: the first group contains the top 15 countries, ranked by N₂O emissions, measured in thousand metric tons of CO₂, while the second group contains the top 18 countries, ranked by share of agriculture in GDP. A pooled mean group approach developed by Pesaran et al. (1999) is used to determine whether long-run relationships exist between the variables after determined by the Hausman test. The results show that N₂O emissions and economic growth are co-integrated in both panels, providing evidence in favour of the EKC. In addition, agricultural land use has a positive and significant effect on N₂O emissions. That is, if countries wish to reduce their N₂O emissions or agricultural N₂O emissions, they should optimize or reduce the use of agricultural land.

Keywords: Agricultural land use; Environment; Exports; N(2)O emissions.