Working Paper No. 1331

Economic Freedom and the CO2 Kuznets Curve

Published: April 20, 2020Pages: 32Keywords: Economic freedom; Environmental performance; Greenhouse gases; Kuznets CurvesJEL-codes: H23; O31; P16; Q55

Economic Freedom and the CO2 Kuznets Curve Christian Bjørnskov

Politicians and international organisations advocate for increased regulation and government control of industry in order to handle climate change and reduce overall greenhouse gas emissions. However, it remains an open question how economic freedom is associated with environmental damage and whether deregulation is harmful to the environment or incentivises the use of green technology.

On one hand, more government control and regulation may force firms and individuals to reduce their emissions. On the other hand, more economic freedom is likely to enable innovation and the adoption of green technological development.

In this paper, I therefore combine data on growth in greenhouse gas emissions and GDP per capita with the Fraser Institute’s Economic Freedom of the World indices in order to test if economic freedom affects emissions. I do so in the context of estimating a standard Environmental Kuznets Curve in which economic freedom can both reduce overall levels as well as shift the shape of the curve.

The results suggest that economic freedom reduces greenhouse gas emissions but also shifts the top point of the Kuznets Curve to the left. Part of this effect may be due to the effect of economic freedom on the adoption of renewable energy.


Bjørnskov, Christian (2020), "Economic Freedom and the CO2 Kuznets Curve". IFN Working Paper No. 1331. Stockholm: Research Institute of Industrial Economics.

Christian Bjørnskov


Ph: +45 87 16 48 19
Mob: +45 20 12 03 84

Interdisciplinary European Studies

The European Union and the Return of the Nation State


This book explores the complex and ever-changing relationship between the European Union and its member states. The recent surge in tension in this relationship has been prompted by the actions of some member state governments as they question fundamental EU values and principles and refuse to implement common decisions seemingly on the basis of narrowly defined national interests.

About the book


Seminars organized by IFN


To present ongoing research informal brown-bag seminars are held on Mondays at 11:30 am. This is an opportunity for IFN researchers to test ideas and results.

Academically oriented seminars are most of the time held on Wednesdays at 10 am. At these events researchers from IFN and other institutions present their research.

In addition, IFN organizes seminars open to the public. Topics for these are derived from the IFN research.

Research Institute of Industrial Economics, Grevgatan 34 - 2 fl, Box 55665, SE-102 15 Stockholm, Sweden | Phone: +46-(0)8-665 45 00 |