The Impact of Energy Consumption Structure on Pollution Emissions in Industrialized and Developing Countries: A panel Smooth Transition Regression (PSTR) Approach

Reducing the emission of pollution, especially polluting gases, is one of the important goals of the world's energy and environmental policies. The purpose of this research is to investigate the effect of energy consumption structure on the emission of polluting gases in some countries of the world, including industrialized developed countries and developing countries. To meet this end, while using data for the period 1995 to 2019, a panel smooth transition regression (PSTR) was applied. In this paper, energy consumption structure, economic complexity index, urban population and the degree of openness of the economy considered as effective factors on the emission of polluting gases. The results of the linearity test confirm the existence of a non-linear relationship between the research variables. A transfer function with a threshold parameter that represents a two-regime model was considered to specify the non-linear relationship between model variables. The slope parameter (transmission speed) is equal to 3.1964. The results of the tests indicate that in both regimes (first and second) in industrialized and developed countries, the structure of energy consumption has a positive effect on the emission of polluting gases.