As the Economy Grows, the Environment Degrades Essay

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In the 1990s, the discourse on the relationship between economic growth and environmental degradation expanded exponentially (Cole & Neumayer, 2005; Stern, 2003; 2004). Most of this intellectual confabulation revolved around the Environmental Kuznets Curve, a hypothesis that argues that environmental degradation would increase during an early economic development phase, eventually reaching the ‘turning point’ where improvement in environmental conditions will begin. In other words, the graphical relationship between per capita income and environmental pollution would be represented by an inverted U-shaped curve, drawing direct relevance to the behavior of the Kuznets curve that (originally) theorizes economic inequality and per capita…show more content…
Panayotou (1995) also contributed significantly by analyzing the variables that explained the inverted U-shape in the context of environmental degradation in greater detail. However, the theoretical framework of the EKC has always been one that has evolved and been constantly revised, in terms of the variables, its methodological approaches and underlying assumptions the model incorporates. For example, whilst attempting to understand the impact of trade and liberalization policies, Lopez (1994) constructed a theoretical framework which depicts how under certain assumptions, the inverted U shaped curve holds true for pollution and incomes. Munasinghe (1999) argues, theoretically and empirically, to validate the existence of the EKC relationship under different economic contexts. By focusing on the marginal costs and benefits of reduction of degradation in the form of pollution, Munasinghe argues that the marginal benefits offered to countries at earlier stages of development are too small to justify environmental action and efficiency. He also discusses the tunneling effect where the turning point of the EKC for a country in the early stages of development can be shifted to a lower plane by imbibing lessons learnt from the cases of developed countries that are on the declining side of the EKC, having made the transition successfully. However, it is imperative to understand the

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