kuznet curve

8/6/2019 Kuznet Curve

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PRESENTED BY:-

Rupesh

Sonali

Sonika


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The environmental Kuznets curve is a

hypothesized relationship between variousindicators of environmental degradation andincome per capita.

The Environmental Kuznets Curve (EKC)hypothesizes that the relationship between percapita income and the use of natural resourcesor the emission of wastes has an inverted U-shape.


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In the early stages of economic

growth, degradation and pollution increase,

but beyond some level of income per capita

the trend reverses, so that at high-income

levels economic growth leads to

environmental improvement.


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The EKC takes after the name of SimonKuznets who had famously hypothesized

an inverted U income-inequality

relationship (Kuznets, 1955).Later economists found this hypothesis

analogous to the income-pollution

relationship and popularized the phrase

Environmental Kuznets Curve.


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The EKC hypothesis contends thatpollution increases initially as a country

develops its industry and thereafter

declines after reaching a certain level ofeconomic progress. It suggests that

environmental damage is unavoidable in

the initial stage of economic development

and therefore, has to be tolerated until theinversion effect kicks in.


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1. The turning point for pollution is the resultof more affluent and progressivecommunities placing greater value on thecleaner environment and thus putting intoplace institutional and non-institutional

measures to affect this.


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2. Pollution increases at the early phase of

a countrys industrialization due to the

setting up of rudimentary, inefficient andpolluting industries. When

industrialization is sufficiently advanced,

service industries will gain prominence.

This will reduce pollution further.


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3. When a country begins industrialization,the scale effect will take place and pollution

increases. Further along the trajectory, firms

switching to less-polluting industries results

in the composition effect, which levels therate of pollution . Finally, the technique

effect comes into play when mature

companies invest in pollution abatement

equipment and technology, which reducespollution.


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Scale effect

Composition effectTechnique effect


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at low levels of income, pollution will risewith neutral growth because the policyresponse is weak.

As income rises, the policy response becomesstronger, hence pollution will start to fall asincome increases.


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At low incomes, pollution initially rises with

growth because increased consumption is valuedhighly relative to environmental quality. Asincome rises, the willingness to pay forenvironmental quality rises, and increasinglylarge sacrifices in consumption are made to

provide great environmental benefits.

The EKC says that the pollution will first increasewith the level of GDP per capita, reach

maximum at around $8,000 and then decrease athigher levels of income.


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It has been argued that this trendoccurs in the level of many of the

environmental pollutants, such as

sulfur dioxide, nitrogen oxide, leadDDT, chlorofluorocarbons, sewage

and other chemicals previously

released directly into the air orwater.


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For example, between 1970 and 2006, the United

States' inflation-adjusted GDP grew by 195%, thenumber of cars and trucks in the country morethan doubled, and the total number of milesdriven increased by 178%.

However, during the same time period the annualemissions of

co falls from 197 m tons to 89m tons

no falls from 27 m tons to 19 m tons

so2 falls from 31 m tons to 15 m tonslead emission fall by 80 %


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However energy, land and resource uses donot fall with rising income, While the ratio ofenergy per real GDP has fallen, total energyuse is still rising in most developed countries

Another example is the emission ofmany greenhouse gases, which is muchhigher in industrialized countries


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In general, Kuznets curves have been found for someenvironmental health concerns (such as air pollution)

but not for others (such as landfills and biodiversity).

However, it is important to note that this does not

necessarily invalidate the hypothesis .

The scale of the Kuznets curves may differ for

different environmental impacts and different

regions. If the concept is accurate, a given area mayneed more wealth in order to see a decline in

environmental pollutants.


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kuznet curve

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