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Focussing on the prime example of CO₂ emissions, we discuss several important theoretical and econometric problems that arise when studying environmental Kuznets curves (EKCs). An EKC refers to an inverse U-shaped relationship between a pollutant and economic activity. The dominant theoretical approach is given by integrated assessment modelling, which consists of economic models that are combined with environmental impact models. We critically evaluate the aggregation, model dynamics and calibration aspects and their implications for the validity of the results. We then turn to a discussion of several important econometric problems that go almost unnoticed in the literature. The most fundamental problems relate to nonlinear transformations of nonstationary regressors and, in a nonstationary panel context, to neglected cross-sectional dependence. We discuss the implications of these two major and …