As the Economy Grows, the Environment Degrades

2801 Words6 Pages

In the 1990s, the discourse on the relationship between economic growth and environmental degradation expanded exponentially (Cole & Neumayer, 2005; Stern, 2003; 2004). Most of this intellectual confabulation revolved around the Environmental Kuznets Curve, a hypothesis that argues that environmental degradation would increase during an early economic development phase, eventually reaching the ‘turning point’ where improvement in environmental conditions will begin. In other words, the graphical relationship between per capita income and environmental pollution would be represented by an inverted U-shaped curve, drawing direct relevance to the behavior of the Kuznets curve that (originally) theorizes economic inequality and per capita income to exhibit the same relationship, named after Simon Kuznets who hypothesized this relationship in the early 1950s. However, the adapted version of the general model into the ecological framework emerged much later in the 1990s, alongside other growing concern for environment such as the development of frameworks such as sustainability.

Theoretical background

The origins and early analysis of the EKC can be traced back to the colossal studies undertaken in the 1990s. Grossman and Krueger’s publication ‘Environmental impacts of the North American Free Trade Agreement’ in 1991 was revolutionary in comparing the general Kuznets Curve and its relevance in the context of environmental degradation. They attempted to establish that economic growth that potentially resulted out of the NAFTA would also account for a degree of environmental degradation. However, with a focus on the specific context of Mexico at the time, Grossman and Kreuger were able to establish the presence of the turning point...

... middle of paper ...

...nd the sustainability framework. The EKC’s limited scope in terms of understanding differences in present and future scenarios, in environmental capacities and resilience, in social choices and preferences within and across countries makes the path it endorses inherently unsustainable in nature. This further hinders the turning point analysis that policy makers are most concerned with as the collective turning point estimated for a given set of countries may or may not hold and may not be socially desirable, even if found to exist in the first place (Dinda, 2003). Also, the dependence and pressure on technology to constantly stay ahead of change offers shaky grounds for the sustainability case as it offers no guarantee that pollution levels that are being allowed under EKC will be within the estimated safe thresholds and temporary in nature (Arrow et al., 1995).

Open Document