Academic journal article European Journal of Sustainable Development

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

Academic journal article European Journal of Sustainable Development

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

Article excerpt

(ProQuest: ... denotes formulae omitted.)

1.Introduction

The increasing pace of growth and extreme pressure of population has led to an increase threat of global warming and climate change .The carbon dioxide (CO2) emission is considered as the main cause to the Green House Gases (GHGs).It is responsible at least 60% to the cause of global warming. Since 1990, the linkage between emission and economic growth has been studied extensively as global warming is raising the concern of environmental degradation. In order to reduce the emission of GHGs, there have been several international attempts of which the Kyoto protocol agreement is the most notable one. The Kyoto Protocol, signed in 1997, is a protocol to the United Nations Framework Convention on Climate Change (UNFCCC) and the important feature of this protocol is to reduce the collective emissions of GHGs of 39 industrialized countries and European Union by 5.2 percent from 1990 level during the period of 2008-2012.In 2015, the historic United Nations Climate Change Conference was held in Paris. It was an opportunity to put the world on course to meet the climate change challenge and to construct a new model of growth that is safe, durable and beneficial to all. The reconciliation of economic growth with environmental sustainability is a major concern in the environment economy debate because the growth theory has majorly ignored environment. On the other hand it was also argued that growth is also a precondition for environmental improvement (Bhagwati, 1993).According to Beckerman (1992) "the strong correlation between incomes and extent to which environmental protection measures are adopted demonstrates that, in the longer run, the surest way to improve your environment is to become rich". Studies by Georgescu-Roegen (1971) have claimed that there exists a trade-off between economic growth and environmental sustainability. In this context, there have been a lot of empirical studies regarding the trade-off that exists between environmental degradation and economic growth. Studies have put forth the hypothesis that there exist an inverted-U-shaped relationship between per capita income and indicators of environmental degradation. According to this inverted U shape relationship between different pollutants and per capita income in different countries which is also called the "Environmental Kuznets Curve"(EKC),environmental degradation first increases with the per capita income and then after a turning point it decreases as per capita income increases. There are few explanations for the inverted U shape of EKC;

a)Scale Effect: Scale of production implies expanding production at given factor-input ratios, output mix, and state of technology. It is normally assumed that a 1% increase in scale results in a 1% increase in emissions. In short, as economy expands there is increase in environmental degradation.

b). Composition Effect: Economies move from subsistence to more material and intensive patterns of agriculture towards industrialization and then to service sector. This development path is the result of capital accumulation and knowledge based economies. Study by (Ekins 1997) suggests that the i) composition effect adds to the scale effect that is it leads to environmental damage at a faster rate than income ii) the composition effect acts against but does not fully counteract the scale effect.

c). Displacement effect: Economies undergo displacement effect in which there is an increased demand of environmental quality as a result of increased income.

Against this backdrop, the objective of the present study is to analyze the relationship between CO2/NO2 (per capita metric tons) and GDP ( per capita) for India .The paper reviews EKC literature, background history, conceptual insights.. It also underlines other econometric problems with estimates of the EKC, and re-evaluates several empirical studies.

2.Origin of Environmental Kuznets Curve

In the sixty seventh annual meeting of American Economic Association in December 1954, Simon Kuznets delivered presidential address entitled /'Economic Growth and Income Inequality ". …

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