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The environmental Kuznets curve (EKC) theory. Part B: Critical issues

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  • Kaika, Dimitra
  • Zervas, Efthimios

Abstract

According to the environmental Kuznets curve (EKC) theory, the process of economic growth is expected to limit the environmental degradation created in the early stages of development. The first article of this study reviews the empirical studies examining various factors, other than income, that may lead to an EKC-pattern. The current article reviews in the first part the major critiques on the EKC-speculation which relate to the following issues: the normal distribution of world income, the feedback from environmental degradation to economic growth, the characteristics of the pollutant in question, various econometric issues, the evolution of consumption when income rises and the assumption about a common developmental pattern in all countries. The second part discusses additional matters reported indirectly in the literature and/or must be further examined. There are doubts whether the GDP-series captures the transition of production to the three productive sectors in empirical estimations and whether services are less polluting compared to industry activities. Finally, the original Kuznets-theory, which laid the groundwork for the EKC-concept, does not seem to solve income inequality problems.

Suggested Citation

  • Kaika, Dimitra & Zervas, Efthimios, 2013. "The environmental Kuznets curve (EKC) theory. Part B: Critical issues," Energy Policy, Elsevier, vol. 62(C), pages 1403-1411.
    • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:1403-1411
    DOI: 10.1016/j.enpol.2013.07.130
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