An Analysis of the Environmental Kuznets Curve (EKC) Hypothesis in Portugal: Sector Data and Innovation Effects

The present article contributes to the existent empirical literature by relating CO
₂
emissions with economic behavior of activity sectors in Portugal, as well as relating with proxies connected to technological development as is the case of R&D (research and development) or TPR&D (total persons working in R&D). For that we use a balanced panel of data from several industries, between the years 1996 and 2013, analyzing for the effect 11 economic activity sectors in Portugal. As main conclusions of our study, we were able to observe two different behaviors of the EKC: the inverted U-shaped behavior and the N-shape form, both behaviors which explain in a different way the relationship between carbon dioxide emissions and the economic growth of activity sectors, as well as their behaviors in the time period analyzed. The conclusions of this work evidence that CO
₂
emissions will not disappear automatically with economic growth. By opposition it can be more serious after a certain level of growth.