Economic growth and emissions: revising the environmental Kuznets curve

Abstract

In most developed economies, the concentrations of pollutants with health impacts have decreased since the 1970s. This has resulted in the discovery of environmental Kuznets curves in the relationship between income and pollution. Grossman and Krueger (1995, p370) have claimed that “. . . air and water quality appear to benefit from economic growth once some critical level of income has been reached.” However, the previous chapter has made clear that the validity of that claim critically depends on a number of implicit assumptions in the estimated relationship. These assumptions have not so far been tested in the empirical literature. Given the fact that the EKC is, after all, more an empirical than a theoretical result, it is remarkable that so little attention has been paid to the estimation techniques used to discover EKCs and in particular to defend the claim that economic growth benefits the environment.