Regional model of EKC for air pollution: Evidence from the Republic of Korea

This study aims to investigate a relationship between economic development and air pollution at the regional level, and further suggest energy policies for climate change mitigation. The present study examines an Environmental Kuznets Curve (EKC) hypothesis analyzing annual panel data of 16 metropolitan regions in Korea over a 16‐year time period. The analysis results show that there is no one‐dominant shape of EKC for SO2 and NO2; each region has its own EKC. That is, although we find the potential existence of U‐shaped and N‐shaped curves, the region‐specific coefficients are enormously heterogeneous across regions. For CO, on the other hand, the random coefficient model shows that there is a dominant U‐shaped curve across regions. In addition, energy consumption appears to be the most significant variable in explaining air pollution. Based on these results, we assert that environmental policy should consider the different characteristics of each region and type of pollutant.