21 Pages Posted: 14 Nov 1998
Date Written: September 1998
Evidence suggests that some pollutants follow an inverse-U-shaped pattern relative to countries' incomes. This relationship has been called the "environmental Kuznets curve." This paper lays out a simple and straight-forward static model of the microfoundations of the pollution-income relationship. We sho that the environmental Kuznets curve can be derived directly from the technological link between consumption of a desired good and abatement of its undesirable byproduct. The inverse-U shape does not depend on the dynamics of growth, political institutions, or even externalities, and can be consistent with a decentralized economy as well as a Pareto efficient policy.
Suggested Citation: Suggested Citation
Andreoni, James and Levinson, Arik, The Simple Analytics of the Environmental Kuznets Curve (September 1998). Available at SSRN: https://ssrn.com/abstract=132949 or http://dx.doi.org/10.2139/ssrn.132949