A Journey Towards Zero Carbon Emissions: Environmental Kuznets Curve Analysis for New Zealand

The New Zealand Government aims to cut greenhouse gas emissions to 50% below 1990 levels and reduce net emissions of all greenhouse gases to zero by 2050. This ambitious target is desirable, however achievement will depend on the current state of the relationship between energy use, CO2 emissions and economic activities of the economy.

This project set out to determine how realistic this aspirational climate change goal really is.

The study used secondary data from World Development Indicators and employed an autoregressive distributed lag (ARDL) model to identify if a long -run relationship exists between CO2 emissions, economic growth and energy use from 1977 to 2015. It also investigated the existence of an environmental Kuzents curve in the historical data using a quadratic function of the variables. Granger causality analysis was used to examine the direction of causal relationship between the variables.

This study linked to the environmental aspect of the triple bottom line taught in a number of business and management papers, and offered a highly topical application of economic theory to real world policy.