Model of Growth and Environmental Quality. A New Evidence of the Environmental Kuznets Curve

Abstract

Recent empirical studies have made evident the existence of an inverted U-shaped relationship between environmental quality and per capita income level, defined Environmental Kuznets Curve (EKC). Different kind of environmental indicators have been used so far to test the EKC hypothesis. This paper empirically tests the hypothesis of the EKC existence using a new version of the curve. It studies the relationship between per capita income and the percentage of Protected Area (PA) within national territory. As it will be show, this allows to by-pass some problems faced with the traditional version of the curve. The primary aim of this paper is to demonstrate that, no matter how sustainable development is defined, it crucially depends on the characteristics of the growth model that a country follows. It does hypothesize that economic growth is a necessary condition in order to better address environmental issues. But it also stresses that development, to be sustainable, needs a mix of new technologies, environmental policies, widespread information and social participation. Contrary to other studies that are mainly concerned with the calculation of the income threshold level, this paper is more concerned with the calculation of the environmental quality threshold level. It demonstrates that participation, as defined in the paper, determines the minimum level of environmental quality a country is willing to accept, that is, the level of environmental quality at which growth starts to be beneficial for the environment. The paper highlights that if the transition point is determined by income level, participation determines the environmental quality corresponding to that point.