Revised environmental Kuznets Curve in CEE countries. Evidence from panel threshold models for economic sectors

The recent environmental debates in the European Green Deal to reduce pollution determine the reconsideration of the relationship between economic development and environmental quality. In this context, this paper explains the GHG emissions in few Central and Eastern European countries (CEEs) (Bulgaria, Poland, Hungary, Slovak Republic, Czech Republic and Romania) in the period 1990-2019 and proposes suitable economic policies to reduce pollution. Environmental Kuznets Curve (EKC) and renewable energy Kuznets Curve (RKC) are considered in a methodological framework based on panel threshold and dynamic panel models. The analysis based on GHG emissions from all economic sectors and GHG emissions from agriculture indicates similarities and differences related to the impact of economic indicators on pollution. The results of estimations indicated an inverted N-shaped relationship between GDP and GHG emissions and an N-shaped pattern between value added in agriculture and pollution. The U-shaped RKC was confirmed for overall economy and for agriculture. The policy proposals based on empirical findings promote sustainable development in the analysed states by reducing pollution.