Confronting the Environmental Kuznets Curve

Abstract

The environmental Kuznets curve posits an inverted-U relationship between pollution and economic development. Pessimistic critics of empirically estimated curves have argued that their declining portions are illusory, either because they are cross-sectional snapshots that mask a long-run "race to the bottom" in environmental standards, or because industrial societies will continually produce new pollutants as the old ones are controlled. However, recent evidence has fostered an optimistic view by suggesting that the curve is actually flattening and shifting to the left. The driving forces appear to be economic liberalization, clean technology diffusion, and new approaches to pollution regulation in developing countries.

Does Foreign Direct Investment Affect Green Growth? Evidence from China’s Experience

“…Conversely, it is possible that FDI improves environmental efficiency in host countries because such new capital helps to modernize the capital stock [18]. Foreign companies employ better management practices and up-to-date technologies that result in a relatively clean environment in the host countries [19].…”

Interactions between economic growth and environmental quality in Shenzhen, China's first special economic zone

“…It assumes that environmental degradation increases when per capita income is at a relatively low level, but that it will start to decline when per capita income reaches a certain point, the so-called turning point. Most EKC studies show that the annual income level at the turning point is around 5000 to 8000 USD (Dasgupta et al, 2002). The conventional EKC has elicited many critiques.…”

National environmental performance: an empirical analysis of policy results and determinants

“…1 A few efforts have been made to use regression analysis or other advanced statistical techniques to explore the relationship between policy choices and environmental performance (York et al, 2003;Dasgupta et al, 2001Dasgupta et al, , 2002Panayotou, 1997). But none of these efforts has examined a large number of countries (including both developed and developing countries) across a broad spectrum of possible policy determinants.…”