Oil exploitation and the environmental Kuznets curve

This study refers to a panel estimation of an environmental Kuznets curve (EKC) for oil to determine the factors most affecting oil exploitation in 38 oil-producing countries during 1990–2000. Control variables such as oil reserves, oil price, population, political rights, and the Gini index were used to determine its contribution to the main EKC model. The empirical results fully support the existence of an EKC for oil exploitation. Furthermore, the result indicates that the proved oil reserves has a significant and positive role in oil production, but oil price and population do not significantly affect crude oil production. Also, increased freedoms and a better income distribution will reduce the rate of oil exploitation. Thus, policies aiming at enhancing democratic society and better income distribution would be more compatible with sustainability.