Environmental Kuznets Curve, Pollution Haven Hypothesis and Business Cycles: Evidence from BRICS Countries

Abstract

This article aims to investigate the Environmental Kuznets Curve Hypothesis (EKC) and the Pollution Haven Hypothesis (PHH), as well as the existence of business cycles for the BRICS countries (except Russia): Brazil, India, China, South Africa. By making use of ARDL models (Bounds Testing Cointegration Approach) for annual data ranging from 1961 to 2013, our estimations suggest mixed results: i) Pollution Haven Hypothesis is observed in the Chinese case, but not in the cases of Brazil, India and South Africa; ii) As for the analysis of business cycles, there are basically no asymmetries, meaning that in times of booms, pollution increases, and in times of recession, pollution decreases; iii) Regarding the Environmental Kuznets Curve Hypothesis, our estimations show that it does not hold for the cases of Brazil and India. On the other hand, China and South Africa’s results indicate the possibility of EKC Hypothesis holding for both countries.