Keywords: economic growth, environmental degradation, limits, environmental Kuznets curve, EKC, green economics, environmental quality, human development, per capita real GDP
A theoretical investigation into the likely existence of the Environmental Kuznets Curve
The Environmental Kuznets Curve (EKC) first emerged in the 1990s as a means of describing the changing relationship between growth and environmental degradation. The EKC is based on the view that, as a nation's per capita real GDP rises over time, environmental quality initially deteriorates but eventually improves as the desire for a clean environment and the wherewithal to obtain it increases. Should the EKC exist, the solution to environmental degradation is not a cessation to growth. Rather, it is the continued growth of a nation's real GDP. A theoretical model previously developed to derive the EKC is extended and employed to determine the level of truth underlying the EKC hypothesis. The revised model indicates that the EKC does not resemble the concave or inverted U-shaped relationship that is presumed to exist between environmental degradation and per capita real GDP. Consequently, improved environmental quality and continued human development can only be achieved if policy-makers strive to achieve sufficiency, equity, natural capital maintenance, and the qualitative improvement of human-made goods.