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Environmental Pollution And Economic Development:Explaining The Existence Of An Environmental Kuznets Curve

Listed author(s):
  • George HALKOS

In this paper we examine the concept of an Environmental Kuznets Curve (EKC) hypothesis in a critical way aiming to justify its existence as well as to propose policies compatible with sustainable development. For this reason, we make use of a data set on CO2 emissions for 32 countries over a 36 year time period. For this balanced panel database, we apply a number of econometric methods to estimate the income-environment relationship. Our results indicate the existence of N-shaped relationship between economic development and pollution. However we show that the turning points calculated by panel data analysis may not reveal the actual turning points valid for individual countries. In our case and using different countries from different geographical regions we found a mixture of monotonic or inverted U-shape or N-shape behaviour. Countries are heterogeneous with different stochastic regression coefficients. This implies that the use of the total N-shape income-environment relationship by policy makers may be misleading with serious policy ineffectiveness implications.

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Article provided by Spiru Haret University, Faculty of Financial Management and Accounting Craiova in its journal Journal of Applied Economic Sciences.

Volume (Year): 6 (2012)
Issue (Month): 6(18)/ Summer 2011 ()
Pages: 148-159

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Handle: RePEc:ush:jaessh:v:7:y:2012:i:1(18)_summer2011:p:148
Contact details of provider: Web page: http://www2.spiruharet.ro/facultati/facultate.php?id=14

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