IIT Madras study disproves ‘Kuznets curve’ hypothesis on environment

Nobel laureate Simon Kuznets (1971 Economics) was of the opinion that as a country grows rich, the environment (like economic equality) suffers initially; but over time, the environmental damage (like economic inequality) declines. The ‘environmental Kuznets curve hypothesis’, therefore, holds that environmental well-being follows economic progress. In other words, the rich countries may have damaged the environment once, but they actually contribute to greening the world.

The proponents of the Environmental Kuznets Curve (EKC) hypothesis advocate that growth is actually a cure for environmental problems, rather than being a cause of it. In their view, environmental problems escalate at the initial phases of growth; it declines thereafter once a certain level of income is achieved by the economies.”

Now, a group of scientists at IIT-Madras, led by Dr Sabuj Kumar Mandal, Department of Humanities and Social Sciences, has found out that in developing countries, the environmental Kuznets curve hypothesis does not hold good.

Dr. Mandal and his student Dr. Devleena Chakravarty have presented their empirical findings on the relationship between the economy and the environment in the context of selected developing countries. The findings were published in the reputed peer-reviewed international open-access journal Environmental and Sustainability Indicators.

For this study, the IIT Madras researchers calculated environment efficiency in terms of carbon dioxide and sulfur dioxide emissions (the more of these emissions meant less environment efficiency). They took average environmental efficiency scores in terms of carbon dioxide (CO2) and sulfur dioxide (SO2) and correlated it with the average gross domestic product (GDP; a measure of economic condition) per capita of more than 15 developing countries such as India, Kenya, Brazil, Malaysia, and Indonesia, among others, for the period 1992–2011.

“Our estimates do not confirm any Kuznets type relationship between economic growth and environmental efficiency in terms of both the pollutants,” the authors say in the paper.

While environmental efficiency in terms of CO2 per capita exhibits an “inverted N-shaped” relationship with economic growth, an insignificant impact of growth on efficiency is observed in case of SO2.

“Our results suggest while economic growth, to some extent, could be a remedy for environmental degradation in terms of CO2 emission, it is not a remedy for SO2 emission,” the paper says.

Countries, therefore, must adopt local level policies, like proper planning for urbanization among others, to control the emission of local pollutants,” Prof Mandal says.