ABSTRACT
This chapter investigates the effects of growth on environmental quality to establish the theoretical underpinnings of the Environmental Kuznets Curve (EKC). It examines the empirical evidence on the EKC that emerges from the crosscountry studies to determine: for which environmental indicators such a curve exists; at what income level environmental degradation starts to decrease decreasing. The chapter discusses the policy implications emerging from the literature on the EKC, especially for the developing countries that are on the upward part of the alleged curve. For water quality indicators, empirical evidence of an EKC is even more mixed. However, when a bell-shaped curve does exist, the turning point for water pollutants is generally higher than for air pollutants. When emissions of air pollutants have little direct impact on the population the literature generally finds no evidence of an EKC. Cross-country studies suggest that the EKC may only be a valid description of the environment-income relationship for a subset of all possible indicators.
