The Rise and Fall of the Environmental Kuznets Curve

Abstract

This paper chronicles the story of the environmental Kuznets curve (EKC). The EKC proposes that indicators of environmental degradation first rise, and then fall with increasing income per capita. However, recent evidence shows that developing countries are addressing environmental issues, sometimes adopting developed country standards with a short time lag and sometimes performing better than some wealthy countries, and that the EKC results have a very flimsy statistical foundation. A new generation of decomposition models can help disentangle the true relations between development and the environment.

On environmental impacts of market-based reforms: Evidence from the European and Central Asian transition economies

“…Several empirical studies such as Shafik (1994), Hilton and Levinson (1998), Harbaugh, Levinson and Wilson (2002), Dinda (2004) have confirmed this relationship although the functional form and data properties can influence findings on the existence of an EKC curve. Other studies such as Tisdell (2001), Stern (2004Stern ( , 2014, Perman and Stern (2003) underscore the limitations of EKC and outline the conditions under which the EKC relationship may not exist such as heterogeneity, spurious regressions, endogeneity, heteroscedasticity, omitted variables and spatial dependence.…”

Revisiting the environmental Kuznets curve in a global economy

“…Johansson and Kristrom [3] noted that the literature on EKC is not enough and this topic needs more empirical investigation. But Stern [4] argued the issues of EKC should be revisited by using new models and new decompositions with different panels and time series data sets. Similarly; Wagner [5] pointed out that the data on per capita CO 2 emissions and per capita GDP are not stationary in time series framework and this problem is not sufficiently addressed in literature.…”

Economic development and multiple air pollutant emissions from the industrial sector

“…1 The EKC hypothesis has been tested in many countries using various pollutant data. E KC studies addressing SO 2 emission and NOx e mission are mainly from the 1990s and early 2000s (see Dinda, 2004;Stern, 2004). In recent EKC studies, most focus on CO 2 emissions, such as in Scotland (Turner and Hanley, 2011), in Spain (Esteve and Tamarit, 2012), 27 EU countries (Lopez-Menendez et al, 2014), 7 Arctic countries (Baek, in print), 19 OECD countries (Wang, 2013), Turkey (de Vita et al, 2015), Vietnam (Al-Mulali et al, 2015), 14 Asian countries (Apergis and Ozturk, 2015) and Tunisia (Jebli and Youssef, 2015).…”