The Simple Analytics of the Environmental Kuznets Curve
22 Pages Posted: 10 Jun 2000 Last revised: 2 Dec 2022
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The Simple Analytics of the Environmental Kuznets Curve
Date Written: September 1998
Abstract
Evidence suggests that some pollutants follow an inverse-U-shaped pattern relative to countries' incomes. This relationship has been called the out a simple and straight-forward static model of the microfoundations of the pollution-income relationship. We show 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.
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