Environmental Kuznets Curve in Croatia: panel data approach with Croatian counties

Concept of sustainable development (SD) has been in the focus of researchers and policy makers in the last two decades. SD is closely linked to the preservation of environment. This paper focuses on finding Environmental Kuznets Curve (EKC) relationship between economic development and pollution in Croatia. In order to empirically evaluate existence of this curve, data on 21 counties for different pollutants and income per capita has been obtained for the period 2008-2016. Different specifications of the relationship are observed: linear, quadratic and cubic, with addition of examining whether the Croatia's accession to the EU has made a significant impact on lowering pollution. Moreover, variables in levels and differences have been analyzed in models. Results show that no EKC relationship is found for all pollutants (CO, CO2, NO2, SO, and PM10) and that entering EU had a positive impact on diminishing pollution in Croatia.