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Carbon Footprint and the Industrial Life Cycle pp 243–268Cite as

Energy Innovation in the Environmental Kuznets Curve (EKC): A Theoretical Approach

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Abstract

This chapter presents the relationship between economic growth and environmental pollution through the theoretical hypothesis of the Environmental Kuznets Curve (EKC). Moreover, it attempts to illustrate the impact of renewable energy sources and energy Research, Development and Demonstration (RDD) on environmental degradation in countries around the world. Many studies have confirmed the existence of an inverted N-shaped EKC pattern in the relationship between income level and the environmental degradation process. These results also indicate that energy regulation processes delay technological obsolescence once economies have reached the early stages of the decontamination process, which, in the long-run, means that an increase in income threshold is required before there can be a return to rising pollution levels. Furthermore, this chapter explains the environmental pollution process through an analysis of low-carbon technologies. It also introduces how income levels affect energy consumption and explains how higher energy demand leads to a larger share of fossil sources in energy mix and, thus, an increase in greenhouse gas (GHG) emission levels. Finally, this chapter offers an empirical approach to the positive impact that energy innovation policies exert over the replacement of polluting sources with renewable ones and explains how these measures help to control environmental pollution levels. In addition, Administrations’ regulatory policies help to delay technical obsolescence and also control the scale effect that causes economies to return to increasing pollution levels. Although the promotion of energy innovation actions has a direct impact on the reduction of GHG emissions, this chapter concludes that, in the long-term, it is necessary to continue implementing energy innovation measures to delay technical obsolescence and, thus, delay the return to a stage of increasing GHGpc emissions.

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Notes

  1. 1.

    IPCC (2013) shows that during the period of 1750–2011, total CO2 emissions generated from human activities amounted to 555 billion tons, among which 240 billion tons have been accumulated in the atmosphere. Many scientists have addressed this and related environmental issues in past studies.

  2. 2.

    Energy Efficiency Directive 2012/27/EU of the European Parliament and of the Council of 25 October 2012 on energy efficiency, amending Directives 2009/125/EC and 2010/30/EU and repealing Directives 2004/8/EC and 2006/32/EC.

  3. 3.

    The Environmental Kuznets Curve (EKC) was initially developed by Grossman and Krueger (1991). It takes its name from the inverted U relationship between economic growth and environmental destruction, whose pattern of conduct resembles that studied by Kuznets (1955) in his analysis of inequality and economic growth (Panayotou 1993).

  4. 4.

    In the field of technological innovation, regulation processes offer an additional explanation supported by the endogenist theory, which holds that the change in the behaviour of the ‘income level/environment’ relationship must be in good part due to the improvement in production processes derived from technological change (Gradus and Smulders 1993).

  5. 5.

    Andreoni and Levinson (1998) show that the ‘income level/pollution’ relation depends, fundamentally, on the technology used for the reduction of pollution and not on the number of polluters or the marginal utility of consumption and environmental quality, or even on the externalities.

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Authors and Affiliations

  1. Department of Political Economy and Public Finance, Economic and Business Statistics and Economic Policy, University of Castilla-La Mancha, Albacete, Spain

    Daniel Balsalobre-Lorente & José María Cantos-Cantos

  2. Energy and Sustainable Development, Montpellier Business School, Montpellier, France

    Muhammad Shahbaz

  3. Civil and Environmental Department, Universidad de Los Andes, Bogotá, Colombia

    José Luis Ponz-Tienda

Authors
  1. Daniel Balsalobre-Lorente
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  2. Muhammad Shahbaz
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  3. José Luis Ponz-Tienda
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  4. José María Cantos-Cantos
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Correspondence to Daniel Balsalobre-Lorente .

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Editors and Affiliations

  1. Nebrija University, Madrid, Madrid, Spain

    Roberto Álvarez Fernández

  2. Polytechnic University, Madrid, Spain

    Sergio Zubelzu

  3. University of Deusto, Bilbao, Spain

    Rodrigo Martínez

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Balsalobre-Lorente, D., Shahbaz, M., Ponz-Tienda, J.L., Cantos-Cantos, J.M. (2017). Energy Innovation in the Environmental Kuznets Curve (EKC): A Theoretical Approach. In: Álvarez Fernández, R., Zubelzu, S., Martínez, R. (eds) Carbon Footprint and the Industrial Life Cycle. Green Energy and Technology. Springer, Cham. https://doi.org/10.1007/978-3-319-54984-2_11

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