Environmental and Sustainability Indicators (Sep 2020)
Is economic growth a cause or cure for environmental degradation? Empirical evidences from selected developing economies
Abstract
The objective of the present study is two-fold. Firstly, to estimate environmental efficiency of selected developing economies in terms of carbon-dioxide (CO2) and sulfar-dioxide (SO2) emission. Secondly, to examine the validity of Kuznets type – U-shaped- relationship between economic growth and environmental efficiency for the period 1992–2011. We apply Directional Distance Function to estimate environmental efficiency and adopt Generalized Method of Moments (GMM) to estimate the relationship between growth and environmental efficiency. Our estimates do not confirm any Kuznets type relationship between economic growth and environmental efficiency in terms of both the pollutants. While environmental efficiency in terms of CO2 per capita exhibits an “inverted N-shaped” relationship with economic growth, an insignificant impact of growth on efficiency is observed in case of SO2. Our results suggest while economic growth, to some extent, could be a remedy for environmental degradation in terms of CO2 emission, it is not a remedy for SO2 emission.
