Testing the theory of Kuznet curve on environmental pollution during pre‑ and post‑Covid‑19 era

Abstract

Covid-19 has brought about significant changes in people's daily lives, leading to a slowdown in economic activities and the implementation of restrictions and lockdowns. As a result, there have been noticeable effects on the environment. In this study, we examine the impact of Covid-19 total cases on the monthly average of carbon monoxide emissions in developed economies known for heavy pollution, covering the period from 2014 to 2023. We apply the Ambiental Kuznets curve approach to analyze the data. By employing different panel estimation techniques such as fixed effects and Driscoll-Kraay regressions, we observe a marked shift in environmental dynamics during the post-Covid era. This shift alters the statistical significance of the N-shaped Kuznets curve, rendering the relationship between economic activity and environmental impact non-significant. Interestingly, the Covid-related variables utilized in the various estimations are not statistically significant in explaining the long-term environmental effects.