Handbook of Environmental and Resource Economics
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Handbook of Environmental and Resource Economics

Edited by Jeroen C.J.M. van den Bergh

This major reference book comprises specially commissioned surveys in environmental and resource economics written by an international team of experts. Authoritative yet accessible, each entry provides a state-of-the-art summary of key areas that will be invaluable to researchers, practitioners and advanced students.
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Chapter 46: The Environmental Kuznets Curve Hypothesis

S.M. de Bruyn and R.J. Heintz


Sander M. de Bruyn and Roebijn J: Heintz’ 1. Introduction One particular aspect in the growth-versus-environment debate that has evoked much discussion in the 1990s has been the finding of a so-called ‘environmental Kuznets curve’ (EKC) between certain types of pollutants and per capita income. According to the EKC, environmental quality declines during early stages of economic development but improves in later stages. Graphically, this visualizes to the inverted U curve between pollutants and economic development, similar to the ‘bell-shaped’ relationship which Simon Kuznets (1955) suggested exists between income inequality and per capita income. Acceptance of an EKC as a descriptive pattern for various types of environmental pressure would suggest that environmental deterioration is only a temporary phenomenon, associated with a particular stage of development. Holtz-Eakin and Selden (1995, p. 3) remarked that the EKC ‘raises the tantalising possibility that instead of there being a trade-ofl between greenhouse gases and economic growth, faster growth could serve as a part of the solution to the world-wide emissions dilemma’ (original italics). Hence if the EKC adequately describes the patterns of environmental deterioration during the course of economic development, economic growth may be beneficial and not harmful to the state of the environment. The benefits of economic growth for environmental protection had earlier been hypothesized by growth ‘optimists’ such as Beckerman (1972) and Simon (1981), who argued that due to income growth people are willing to spend a larger share of their budget on environmental protection. With the finding of an EKC, this...

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