Economic growth and patterns of emissions - reconsidering the empirical basis of environmental Kuznet Curves

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Abstract
Recent empirical research indicates that certain types of emissions follow an inverted-U or Environmental Kuznets Curve (EKC) as income grows. This regularity has been interpreted as a possible de-linking of economic growth and patterns of certain pollutants for developed economies. In this paper we investigate the empirical basis of this result, by considering particular weaknesses of the various EKC studies performed. It is argued that the inverted-U relationship between income and emissions estimated from panel data needs not hold for specific individual countries over time and does not capture the impacts of economic growth on changes in emissions adequately. Based on insights from "intensity-of-use" analysis in resource economics an alternative growth model is specified and estimated for emissions of S02, NOx and CO2 in the Netherlands, United Kingdom, United States and Western Germany. It is found that the patterns of most of these emissions correlate positively with economic growth and that emission reductions may have been achieved as a result of structural and techno­logical changes in the economy. Sustainable growth is defined as the rate of economic growth that can go along with zero emission growth and its rate is calculated for each type of emission and country, based on estimated parameter values. The resulting indicators reflect a balance between positive growth effects and negative impacts of structural change and technological progress on emission levels.
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