The relevance of environmental Kuznets curve (EKC) in a framework of broad-based environmental degradation and modified measure of growth – a pooled data analysis

Abstract

The economic growth and natural environment trajectory has been expressed and interpreted in myriad ways. One hypothesis that is comprehensively used to empirically model the economic growth and environmental degradation relationship is the widely known environmental Kuznets curve (EKC hypothesis). However, the initial EKC formulation has stimulated a large debate around the need for alternative representations of the relationship between economic growth and environment. In this paper, we have introduced some modifications to the standard EKC. In particular, we have changed the dependent variable substituting a pure environmental stress as in the standard EKC with a wider assessment of environmental pressure defined by the environmental degradation index (EDI). Of the two models that we have considered in our study, we have taken gross domestic product (GDP) as the explanatory variable in one model and development balance index (DBI) in another model. The results show an N-shaped pattern for most of the countries considered.

Keywords:

• EKC
• GDP
• environmental degradation
• development balance index (DBI)
• regression