Environmental Kuznets curves: mess or meaning?

Abstract

There may be relationship between output and environmental degradation. The shape of this relationship is proposed to be an inverted ‘U’ shape for a number of pollutants. The purpose of this paper is to review empirical literature on the environmental Kuznets curve and to draw any lessons that might be useful to policy makers. Evidence is tabulated for a wide range of pollutants. In aggregate, there appears to be a relationship between specific environmental pollutants and income per capita, however the shape of the relationship is not uniform across pollutants, and turning points, when they exist, differ across pollutants. This leads to the conclusion that there is no single relationship between income, environmental quality and the rate of environmental degradation. It is possible to grow out of some types of environmental degradation, but whether this is the case will depend on the type of pollution that is examined. Hence, policy makers should recognise the deficiencies of the theory behind the environmental Kuznets curve. Even if environmental Kuznets curves do exist, several decades may pass before turning points are reached, and extensive environmental degradation may occur in the meantime. The turning point on the environmental Kuznets curve is probably associated with the dynamics of individual environmental elements that change with income. Progress still needs to be made in order to learn which variables do have turning points in their relationship with output so that we can decide which policies to follow. If a massive increase in pollution is to be avoided, a proactive and explicit approach to environmental quality is needed across countries, which probably does not use the knowledge gained from an environmental Kuznets curve.

Keywords:

• environmental Kuznets curves
• empirical evidence

Acknowledgements

Paul Dunne, Peter Howells, Brian Garrod and Richard O'Doherty are thanked for their useful comments. Any remaining errors are the authors' responsibility.

Notes

1. A thorough examination is beyond the scope of this paper.

2. At Kyoto in 1997, a breakthrough in combating global warming seemed on the verge of taking place. Thirty-eight industrialised countries agreed to take on the task of reducing greenhouse gases by a global total of 5.2% by 2010.

3. A last minute piece of legislation by Bill Clinton scuppered George W. Bush's ambitions to cut down vast quantities of forest in his apparent life-long quest to extract more oil (Leeds Student, p. 10).