Question

What is an Environmental Kuznets Curve? What is the state of research on this concept? Why is this concept a matter of policy interest?

Answer 1

Environmental Kuznets curve explain the relationship between environment and economic development. Environment cost played an important role in economic development. At initial level of development there is a deterioration created towards environment. But gradually this will be maintained and the society begin to improve its relationship with environment, and also the degradation towards environment reduced.

In the figure, (a) shows the pre-industrial economies, (b) is the industrial economics and (c) is the post industrial economies or the service based economies. The turning point in the diagram shows that the environment degradation will be low to the right of the turning point. It shows that the right of the turning point shows service sector, which have low impact towards environment. This concept played an important role in the development process and also during the selection process. So policy makers give preference to this during policy formation. There are several evidences shows that the higher economic growth can be attained through controlling population. If there is a high level of population, the exploitation towards environment increased. This will affect the development policies in the future also. The environmental goods are non-renewable in nature, and policies should be formed on the basis of this. The selection of proper technology and appropriate policies will reduce the degradation towards environment. This Kuznets curve gives preference to the role of government in environmental protection. The high level of decentralisation will be generated during the transformation from agrarian to industrial sector. The service sectors having low impact towards the environment than the manufacturing level.