Vol. 1(2) SEP 2011 - SAVAP International

Academic Research International
ISSN: 2223-9553
Volume 1, Issue 2, September 2011
So we now leave this one particular paper and find out what other workers have concluded
about the validity and extent of application of the EKC hypothesis.
AN ATTEMPT AT CONSENSUS
By the middle of the 1990s a considerable amount of analysis had been carried out. However
drawing valid conclusions was hampered by limitations in the available data:
Two different types of data set had been used by investigators. The first, and most used type
was ‘cross-sectional’ - examining the actual GDP/environmental indicator relationship at
some point in time across a whole set of countries. The second type of data set provides timeseries
within countries: how the GDP/environmental indicator relationship has changed over
time in individual countries. This second type of data set is the best type for investigating the
Kuznets relationship; unfortunately, such historical data sets that were then available were
usually of short time length, making it difficult to draw useful conclusions from this sort of
data set alone.
Now there is an assumption made in drawing conclusions from cross-sectional data sets. This
is that all the countries involved will eventually show the same time trajectory of change in
the GDP/environmental indicator relationship. But there is no guarantee that countries in the
early stages of per capita GDP growth will eventually develop in the same way that countries
in much later stages of GDP growth have already developed. Analyses based on crosssectional
data must then be treated with caution, especially if not backed up by time-series
based analyses.
Vincent (1997) comments on this issue. He points out that “virtually all the low-income
observations come from developing countries, while all the high-income observations come
from developed countries”. This lack of overlap means that conclusions about a changing
relationship between GDP and environmental change could be nothing more than statistical
artefacts:
“‘environmental Kuznets curves’…may simply reflect the juxtaposition of a positive
relationship between pollution and income in developing countries with a fundamentally
different, negative one in developed countries, not a single relationship that applies to both
categories of countries”.
Despite these difficulties, there was a growing opinion amongst workers in the field that
some legitimate conclusions could be drawn about the EKC hypothesis, and in 1994 an
important cooperative initiative was taken by the Royal Swedish Academy of Sciences when
they organised a workshop on the subject of this hypothesis. One outcome of this meeting
was an attempt by eleven scientists from the USA, Sweden and England to establish what
was the general consensus about the significance of the EKC hypothesis. Their paper was
published in the journal Science (Arrow et al. 1995). In the same year the Institute for
Ecological Economics hosted a ‘forum’, inviting a selection of workers to contribute papers
discussing various aspects of this supposed consensus, and subsequently these papers were
published in various journals.
Arrow et al noted that the inverted U-shaped relationship between some measures of
environmental quality and per capita income had been used as evidence to support the general
proposition that economic growth is good for the environment. However, they point out that
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