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Environmental Kuznets Curve

 
 

By Michael J. Lynch, University of South Florida, FL

 
 

Traditional economic analysis of the association between development and pollution has largely been framed from the perspective of the Environmental Kuznets Curve (EKC) hypothesis. EKC research appeared in the academic literature in the early 1990s, and a number of studies have been undertaken which examine this hypothesis.
The EKC hypothesis is an extension of the Kuznets Curve hypothesis introduced by Simon Kuznets. The Kuznet Curve was specifically designed to examine the relationship between income and economic inequality. The Kuznets Curve hypothesis suggested that over time, the relationship between per capita income and economic inequality follows an inverted “U” shape. During the upward phase of the curve, per capita income and inequality increase together. At some point, however, as per capita income is “saturated,” the relationship between per capita income and inequality changes, so that as per capita income rises, inequality declines. In general terms, this argument suggests that the long term process of industrialization proceeds, per capita income reaches a point where society begins to address social need such as welfare, causes a decline in income inequality. Thus, the Kuznets hypothesis suggests that industrialization plays a positive long term role in reducing income inequality. Since this entry focuses on the EKC and not the Kuznets curve itself, we ignore the state of the empirical evidence on this relationship and criticisms of the economic Kuznets Curve hypothesis (e.g., Deininger and Squire, 1998).

Following this general argument, the Kuznet Curve has been applied to the development-pollution relationship. When applied to pollution, this EKC argument hypothesizes that as the development-pollution association also follows an inverted “U” shaped pattern. During the first phase of development, for example, as income (a measure of development) grows, environmental quality erodes. As in the Kuznet Curve argument, the EKC suggests that at some point when the growth of income reaches a given (undefined) point, continued expansion of income leads to a decreases in environmental harm (Grossman and Krueger, 1991). Dinda (2004) suggests three explanations for the EKC per capita income-pollution curve. (1) During the upward portion of the curve, the long term transition from agrarian to industrial production increases the production of pollution (the initial rise in the production of pollution). (2) As industrialization accelerates and incomes rise, those with increased incomes prefer a clean environment leading to the decline in environmental pollution. (3) During the downward phase, additional reductions in pollution may occur as industrial production is exported to developing nations and is replaced by service economies. Generally, the EKC argument takes a micro-economic rather than a macro-economic view of the relationship between development and pollution. Thus, in that view, as citizens experience greater prosperity they demand a cleaner environment, and this demand is met by both political responses and by corporate responds that promote a reduction in environmental pollution (Grossman and Krueger, 1995).

There is a large empirical literature that addresses the EKC hypothesis, and it is not necessary to review that literature in its entirety here. Early studies tended to confirm the EKC hypothesis. In recent years, the empirical evidence has been mixed as noted below.

Supporting studies include the following recent examples. In their study, Choumert, Motel and Dakpo (2013) estimated 547 empirical measures of the effect of development on deforestation from 69 studies previously published in the literature. After examining these estimations, they conclude that there is an EKC effect for deforestation which peaks in 2001 and declines thereafter. The following studies also support the EKC hypothesis on the relationship between development and carbon dioxide pollution: Ahmed and Long (2013; Pakistan); Baek and Kim (2014; Korea); Chandran-Govindaraju and Tang (2013; China); Choong and Eng (2014; Mayaysia); Chow and Li (2013; across a sample of nations); Ibrahim and Law (2013; across a sample of nations); Roach (2103; across US states); Shahbaz, Mutascu and Azim (2013); Romania); Shahbaz et al., (2013; Turkey) and Tiwari, Shahbaz and Hye (2013; India). In addition, Shahbaz, Tiwari and Nasir (2013) found an EKC effect related to economic growth and increased energy emissions. Kleeman and Abdulai (2013) found general support for the EKC hypothesis for several different pollutants.

Several studies rejected the EKC hypothesis for specific locations: Saboori and Sulaiman (2013; Malaysia), Fan and Zheng (2013; China), and Robalino-Lopez at al. (2014; Ecuador) and across nations (Abou-Al and Abedelfattah, 2013) and Wang et al. (2013). Inconsistent evidence of an EKC effect has been found by Wong and Lewis (2013; Southeast Asia), and Al-Sayed and Sek (2013; across 40 countries).

Finally, a group of studies failed to find evidence of the inverted “U” relationship, and instead found evidence of an “N” shaped relationship. These studies indicate that as economic development continued, locations experience a second rise in ecological destruction or pollution (Babu and Datta, 2013; Datta and Sarkar, 2013; Wang, Din and Wu, 2014). A last groups of studies reject the EKC hypothesis finding a “U” haped rather than an inverted “U” relationship between development and ecological destruction (Ozcar, 2013, for carbon dioxide pollution; Asici , 2013 for a sample of 213 nations).

Taken together, the mixed evidence from these studies suggests that the EKC is not supported – that is, there is no general invert “U” relationship between development and ecological destruction.

Green criminologists have not paid much attention to these studies, and perhaps, given the mixed results, this omissions of this literature from green criminology may matter very little. However, given that the EKC is widely accepted despite conflicting results, green criminologists may wish to comment on the development-ecological destruction association. If, for example, the EKC is rejected and the reverse condition holds – that there is an association between development and ecological destruction where increased development promotes ecological destruction – this may impact the way criminologists interpret the results of their research. Moreover, green criminologists may wish to raise certain questions about this relationship such as whether development can be considered a crime against nature and whether there are justice issues attached to the development-ecological destruction connection that require attention.

 
 
Further Reading



References

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