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The effects of increasing income on environmental quality is an issue that has long puzzled economists. For over a decade, economists have theorized that a graph of environmental degradation versus income often looks something approximating an inverted-U shape, dubbed the environmental Kuznets curve (EKC) after Simon Kuznets' work in the 1950s and 1960s on income equality (Kuznets 1955, 1965). Among the reasons why economists have found the effects of increasing income on environmental quality so intriguing is that the answers to this question would help resolve fundamental issues concerning humanity's ability to develop economically, while still preserving the environment. Some economists hypothesize that there is a causal relationship between income and environmental degradation, and that the relation is in the shape of an inverted U: as countries "get rich, … first [environmental] problems increase, and then they decrease" (Lomborg and Pope 2003, p.9). According to this theory, the solution to environmental problems is to alleviate poverty.

Abstract. Whether globalization is good or bad for the environment has been studied intensively in recent years. However, few studies have explicitly provided a general picture of globalization around the world or considered the rich dimensions of globalization outside of economic globalization. By applying the new KOF globalization index in a panel data sample of 166 countries over the 1990-2009 period, our results suggest that, on average, overall carbon emissions rise with higher levels of economic, social and political globalization, although the effect varies by OECD and non-OECD country group. After decomposing the main contributors of carbon emissions, our further data from the manufacturing and construction sector yield evidence consistent with a pollution haven effect in terms of climate change.

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