An enquiry into the existence of environmental Kuznets curve and issue of convergence related to CO 2 emission - a panel data analysis

A world-wide concern has recently emerged about the rapid depletion of natural resources and degradation of environmental conditions caused by the actions of both developed and developing groups of countries. Analysis of panel data covering the period 1990-2008, shows that developed countries are facing an N-shaped curve regarding the relation between income and CO2 emission while EKC relation holds for developing countries. The observance of EKC should not however make the developing countries complacent. The observed convergence in CO2 emission growth indicates that the developing region is catching up at a faster rate with the developed countries. Hence, with an extended future time, there is likelihood that N-shaped pattern might ensue for developing countries also. Introduction of economic instruments for pollution control and strict enforcement laws, greater use of captive mechanism for carbon capture, strengthening institutional rules of forest management though greater peoples' participation in forest protection and plantation necessary for enhancing carbon pool capacity of forest, rapid grant of indigenous forest rights, blocking the entry of hazardous products through multinational companies, gradual shift to renewable energy sources, like biodiesel, ethanol, etc., might partially reverse such possibility.