Testing Environmental Kuznets Curve (EKC) Hypothesis for Deforestation in Lao PDR

Abstract

This paper investigates the existence of the Environmental Kuznets Curve (EKC) in Lao PDR. We examine for short-run and long-run relationship between economic growth, deforestation rate, agricultural production index, rural population, and debt for the period 1991 – 2015 by applying Autoregressive Distributed Lag (ARDL) approach to cointegration. The empirical result does not support an inverted U-shaped relationship (EKC) for the case of Lao PDR. However, the finding shows that agricultural production index and rural population increase deforestation which indicates that agricultural activities in the rural areas cause a negative impact on the forest in Lao PDR. This study provides helpful information for Lao scholars and policy-makers in order to develop and implement environmental policies of the country.