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

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  • George HALKOS

Abstract

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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  • George HALKOS, 2012. "Environmental Pollution And Economic Development:Explaining The Existence Of An Environmental Kuznets Curve," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 6(6(18)/ Su), pages 148-159.
  • Handle: RePEc:ush:jaessh:v:7:y:2012:i:1(18)_summer2011:p:148
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    Cited by:

    1. George Halkos & Iacovos Psarianos, 2016. "Exploring the effect of including the environment in the neoclassical growth model," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(3), pages 339-358, July.
    2. Halkos, George, 2014. "The Economics of Climate Change Policy: Critical review and future policy directions," MPRA Paper 56841, University Library of Munich, Germany.
    3. Halkos, George, 2018. "Advances in Green Economy and Sustainability: Introduction," MPRA Paper 86534, University Library of Munich, Germany.
    4. Halkos, George & Psarianos, Iacovos, 2015. "The effect of including the environment in the neoclassical growth model," MPRA Paper 68050, University Library of Munich, Germany.
    5. Halkos, George & Polemis, Michael, 2016. "The good, the bad and the ugly? Balancing environmental and economic impacts towards efficiency," MPRA Paper 72132, University Library of Munich, Germany.
    6. Halkos, George, 2011. "The evolution of environmental thinking in economics," MPRA Paper 35580, University Library of Munich, Germany.

    More about this item

    Keywords

    Environmental Kuznets Curve; Panel Data; CO2 emissions;

    JEL classification:

    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth
    • O20 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - General
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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