An Inverse Global Environmental Kuznets Curve

This paper articulates the necessity of emphasizing the absolute level of environmental
degradation in different countries as a guide to understanding the links between such
degradation and economic development. We argue the case for developing a composite
environmental degradation index (EDI) and relating it to a better measure (in comparison
to per capita income) of economic development, viz. the HDI with a view to developing a
Global EKC (GEKC) across 174 countries. We put forward a methodology that would
achieve this end. This has necessitated the use of principal components analysis to extract
information and for forming an index of global environmental degradation. This index
has then been related to the HDI.
Some other conclusions of the paper are as follows. First, there seems to be an inverse
link between HDI ranks and EDI. Second, the US alone has a highly disproportionate
(adverse) influence on all the six environmental degradation indicators. Therefore, in the
design of a regulatory mechanism for global environmental management this factor
would have to be recognized explicitly.
In the extant literature there is no consensus about the empirical basis for global
environmental degradation (GED). All along the two contending views only try to verify
whether or not an inverted U shaped EKC exists. Even if we agree that an inverted U
shaped EKC does not exist it does not follow that an inverted N shaped global EKC
exists. Our study argues precisely that an inverted N shaped global EKC does indeed
exist and provides empirical support for this position. In the process we discover extreme
inequalities in the contribution of low, medium and high country groups to GED with the
low country group effectively ameliorating GED and the high group countries
exacerbating it.
There are several important implications of the results of this paper and a few of
these may be mentioned here. First, it provides a framework for assessing the current
state of environmental degradation and its distribution world-wide. Thus, it would
provide important inputs to a global agency like a WEO that would be interested in
monitoring environmental degradation and its geographical distribution. Second, by
relating such degradation to HDI, this relationship would highlight the contributions of
countries with different levels of human development and assist in assigning liability.
The contention that GED is essentially ‘caused’ by a certain type of development
characteristic of high (income) development countries is borne out by the results of this
study.
These conclusions clarify that the first and foremost concern of global environmental
management, and the WEO, should be to reckon with the inequality in global
environment degradation and its intrinsic relationship with inequalities across countries in
levels of economic development.