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A note on ‘the simple analytics of the Environmental Kuznets Curve’

Published online by Cambridge University Press:  17 November 2006

FLORENZ PLASSMANN  and
NEHA KHANNA
FLORENZ PLASSMANN
Affiliation:
Department of Economics, State University of New York at Binghamton, PO Box 6000, Binghamton, NY 13902-6000. Tel: 607-777-4304. Fax: 607-777-2681. Email: fplass@binghamton.edu
NEHA KHANNA
Affiliation:
Department of Economics & Environmental Studies Program, State University of New York at Binghamton, PO Box 6000, Binghamton, NY 13902-6000. Tel: 607-777-2689. Fax: 607-777-2681. Email: nkhanna@binghamton.edu
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Abstract

In a widely cited paper, Andreoni and Levinson (2001) argue that, under very mild restrictions on preferences, increasing returns to scale in pollution abatement are a sufficient condition for pollution to ultimately fall to zero with income growth. We show that the existence of an Environmental Kuznets Curve depends on the relative magnitudes of the returns to scale in abatement and in gross pollution, rather than on their absolute values. Increasing returns to scale in abatement by themselves are not sufficient for pollution to fall with income unless the returns to scale of abatement exceed the returns to the production of gross pollution.

Type
Research Article
Information
Environment and Development Economics , Volume 11 , Issue 6 , December 2006 , pp. 697 - 707
Copyright
2006 Cambridge University Press

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Footnotes

We thank the journal editor and three anonymous reviewers for their comments on an earlier draft. All errors are ours.