The Kuznets Curve for the Environment and Economic Growth: Examining the Evidence

Abstract

Recent research has examined the relationship between certain indicators of environmental quality and income, concluding on the basis of econometric estimation that in some cases an inverted-U relationship, which has been called an environmental Kuznets curve (EKC), exists between these variables. There has been speculation on the implications of this for economic and environmental policy. In this paper I examine this research as a whole and find that unequivocal evidence for an EKC relationship is very scant; that there are important indicators which show a monotonically increasing relationship; that even where there may be an EKC relationship, most of the world's population is still on the section of the curve that is increasing, so that growth in income on the basis of this relationship would result in considerable further environmental damage; and that reviews of overall environmental quality even in the richest countries show that it is still declining. I conclude that from the point of view of environmental sustainability the income—environment relationship is still very problematic and that determined environmental policy will be required if future income growth is to be compatible with sustainable development.