Environmental Kuznets Curve for CO2and NOx emissions: A Case Study of India.

Abstract

The causal relationship between economic growth, environmental consumption and degradation has been a subject of debate for last few decades. In this regard, the inverted U-shaped Environmental Kuznets curve (EKC) demonstrates (pollution-income relationship) that initially the environmental degradation and pollution surpass the level of income per capita; however this trend reverses since at the higher income levels economic growth initiates environmental improvement due to technological change that allows cleaner input to be used in the production of goods and services. This debate is reminiscent of the one that resulted from the Club of Rome Report (Meadows et al 1972).Unresponsive regarding environmental protection and endeavour to speed up economic growth had not only kept environmental considerations as secondary objectives in policy making in these countries but also threatened their sustainable future. This paper reviews the empirical studies that have examined the relationship between environmental degradation and economic growth. It also underlines other econometric and methodological problems with estimates of the EKC.  Based on secondary data with reference to India, an empirical   econometric model is tested to analyze the relationship between NOx, CO2 (in per capita metric tones) and GDP(per capita). The implications for environmental policy with particular reference to a developing country like India are addressed.

 

 Key Words: CO2, Environmental Kuznets curve (EKC); Economic growth; Environmental degradation;  GDP per-capita; India,NOx.

JEL classification: N50, O13, Q00, Q20, Q50.