An Environmental Kuznets Curve for water pollution: Does water abundance affect the turning point?

Abstract

We consider water abundance in an Environmental Kuznets Curve for water pollution with a large panel dataset covering relatively more countries and years than previous research. Our dataset includes 151 countries covering 19 years from 1992 to 2010. We divide countries into categories based on per capita income and water abundance. We find evidence for an EKC in approximately half the model specifications, but turning points are generally greater than the average income. Interestingly, interacting water abundance with income results in a negative relationship between income per capita and water pollution for the full sample. Different model specifications appear to imply this result is driven primarily by rich countries. Policies to improve water quality include stricter environmental regulations, particularly for poorer countries.