Working Paper: NBER ID: w6739
Authors: James Andreoni; Arik Levinson
Abstract: Evidence suggests that some pollutants follow an inverse-U-shaped pattern relative to countries' incomes. This relationship has been called the out a simple and straight-forward static model of the microfoundations of the pollution-income relationship. We show that the environmental Kuznets curve can be derived directly from the technological link between consumption of a desired good and abatement of its undesirable byproduct. The inverse-U shape does not depend on the dynamics of growth, political institutions, or even externalities, and can be consistent with a decentralized economy as well as a Pareto efficient policy.
Keywords: Environmental Kuznets Curve; Pollution; Economic Growth
JEL Codes: Q56; O44
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| income (E25) | pollution (Q53) |
| income (E25) | pollution abatement (Q52) |
| pollution abatement (Q52) | environmental quality (Q50) |
| consumption (E21) | pollution (Q53) |
| technology (O39) | pollution abatement (Q52) |
| pollution (Q53) | income (E25) |
| pollution (Q53) | environmental quality (Q50) |