Environmental Kuznets Curve: Revisiting the Unsettled Debate
Indian Journal of Economics, 96(382), 535-570
Posted: 2 Oct 2017
Date Written: January 1, 2016
This paper has made an attempt to test the Environmental Kuznets Curve (EKC) hypothesis using the Environmental Performance Index (EPI). The EPI is a method of quantifying and numerically marking the environmental performance of state policies incorporating various environmental indicators on ecosystem vitality. EPI assesses environmental quality better than separate environmental indicators, which are usually used to test the EKC hypothesis. In this study, EKC hypothesis has been tested using cross-section data for the year 2010 and 2014. The results reject the hypothesis of inverted U shape of EKC and validate cubic or N shape of EKC. As this study based on EPI not on ENVIRONMENT degradation index, hence N shape of EKC is equivalent to inverted N-shape of EPC in this paper.
It implies an increase in GDP per capita degrade the environment at initial stage, after attaining critical level of per capita, environment improves but after certain point again environment degrades with rise in GDP per capita. The study also reveals positive impacts of the human development on the environmental performance while gender inequalities seem to have negative impacts on the environmental performance.
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