The Validity of the Enviromental Kuznets Curve Hypothesis in the Transportation Sector: the Case of Selected OECD Countries

Economic activities in the transport sector are one of the main reasons for the increase in carbon emissions. In recent years, it can be clearly stated that there has been a noticeable increase in service demand in the transportation sector depending on globalization and integration activities that have reached significant levels among the countries. In this respect, this paper investigates the relationship between the total output level of the transportation sector and the carbon emission sourced from the same sector for selected OECD countries spanning the period 1995-2016 within the framework of the Environmental Kuznets Curve hypothesis. The Augmented Mean Group (AMG) estimator findings for the panel group show that there exists an inverted-U shaped relationship between the total output level in the transport sector and environmental pollution in selected OECD countries. The Country-specific results vary by country to another. Besides, the analysis reveals that the negative impact of total output on environmental pollution in these countries would be approximatively 36.033 billion dollars. It is seen that USA, Japan, France and Germany have reached this threshold income level. According to the results of Dumitrescu-Hurlin (2012) causality test, it is estimated that there is a bidirectional causality relationship between the carbon emission in the transportation sector and the total amount of output.