TESTING THE VALIDITY OF THE ENVIRONMENTAL KUZNETS CURVE HYPOTHESIS IN THE CONTEXT OF AGRICULTURAL POLLUTION: AN APPLICATION WITH PANEL DATA ANALYSIS IN G20 COUNTRIES

Abstract

Agricultural pollution has reached critical levels globally, making it important to investigate how agricultural emissions will change with economic development. This study empirically investigates whether agricultural pollution follows the Environmental Kuznets Curve (EKC) framework for G20 countries over the 1990-2020 period. Distinctively, the research focuses on nitrous oxide (N2O) and methane (CH4) emissions, which possess significantly higher global warming potential than carbon dioxide (CO2). This study employs panel data techniques that account for cross-sectional dependence and heterogeneity, using CIPS unit root and Westerlund cointegration tests; coefficients were calculated using the Common Correlated Effects Mean Group (CCEMG) estimator. The findings support the EKC hypothesis for agricultural N2O emissions and reveal inverted U-shaped relationship. The turning point for N2O emissions is identified at a GDP threshold of approximately $1.377 trillion. The findings do not support the EKC hypothesis for agricultural methane (CH4) emissions. Furthermore, the roles of renewable and fossil energy consumption in mitigating emissions are analyzed. These results provide critical policy implications for G20 nations regarding the balance between economic growth, agricultural sustainability, and energy transition.