Kuznets Environmental Curve for Ecuador: An Analysis of the Impact of Economic Growth on the Environment

In the present investigation, an analysis of the impact of economic growth on the environment during the period 1971–2015 in Ecuador was made. The hypothesis of the environmental Kuznets curve was used as a study tool. We estimated this relationship in a country with strong dependence on revenues from the exploitation of natural resources and a low level of industry participation in gross domestic product (GDP). To generate empirical evidence, the methodology of the third degree Almon polynomial was applied with three lags in time. The variables were examined by informal econometric tests such as graphs of time series, stationarity, and seasonality as well as formal differences such as Dickey Fuller to check the effectiveness of their contribution in the research. Finally, the results reveal a direct, positive relationship in the short term between economic growth and CO 2 emissions. The confirmation of the hypothesis opens the door to the discussion of optimal conditions of production while minimizing pollution, which is a dilemma that states face since they require a way to produce while maintaining a healthy and balanced environment.