Is the Environmental Kuznetsk Curve a useful tool?

What is ' Environmental Kuznets Curve' ?

A hypothesized relationship between environmental quality and economic development

various indicators of environmental degradation tend to get worse as modern economic growth occurs until average income reaches a certain point over the course of development.

Untitled Slide

• Low-income period: focus on industrial growth and national income rather than on pollution control
• High-income period: Citizens demand better living environments; firms and governments have the capacity to respond effectively.
• Strong economies tend to transfer from heavy industries to service inductry.

Too poor to be green

• Low income period--- serious environmental pollution--- economical stagnation--- can't reach the turing point

Emissions

• It is clear that emissions of many pollutants per unit of output have declined over time in developed countries with increasingly environmental regulations and technical innovations.
• But the mix of residuals has shifted from sulfur and nitrogen oxides to carbon dioxide and solid waste so that aggregate waste is still high and per capita waste may not have declined.

As the older pollutants are cleaned up, new ones emerge, so that overall environmental impact is not reduced.

Outsource

• Environmental regulation in developed countries might encourage polluting activities to gravitate toward the developing countries.
• When the poorer countries apply similar levels of environmental regulation they would face the more difficult task of abating these activities rather than outsourcing them to other countries

One can't fit all

• Developing countries: population, overexploitation of environment, technology
• Developed countries: overconsumption
• The problem won't be solved automatically--- too optimistic

References

• Andreoni, J., & Levinson, A. (2001). The simple analytics of the environmental Kuznets curve. Jour- nal of Public Economics, 80, 269–286.
• Ansuategi, A., & Perrings, C. A. (2000). Transboundary externalities in the environmental transition hypoth- esis. Environmental and Resource Economics, 17, 353– 373.
• Ansuategi, A., Barbier, E. B., & Perrings, C. A. (1998). The environmental Kuznets curve. In J. C. J. M. van den Bergh & M. W. Hofkes (Eds.), Theory and implementation of economic models for sustainable development. Dordrecht: Kluwer.
• Antweiler, W., Copeland, B. R., & Taylor, M. S. (2001). Is free trade good for the environment. American Economic Review, 91, 877–908.

The deterioration evaluation

• Some changes are hard to evaluate
• biological diversity
• groundwater pollution
• land corrosion