The Effects of Corruption Control and Political Stability on the Environmental Kuznets Curve of Deforestation-Induced Carbon Dioxide Emissions

This article formulates a structural empirical model that measures the short run and long run effect of economic growth, political stability and corruption control on carbon dioxide (CO2) emissions from deforestation. Income has a negative effect on forest cover in the short run but it does not have any long run effect. In contrast, political stability and corruption have relatively smaller effects on forest cover in the short run but they have lingering long run effects. We derive a U-shaped forest-income curve where political stability and corruption control do not significantly affect the income turning point but both variables shift the curve up or down. The resulting CO2 emission-income curve is downward sloping and is based on changes in the levels of variables affecting forest cover. Increased political stability flattens the CO2 emissions-income curve leading to smaller changes of CO2 emissions per unit change in income.