International Review of Environmental and Resource Economics > Vol 6 > Issue 3

The Environmental Kuznets Curve: A Survey of the Theoretical Literature

Roberto Pasten, Department of Economics and Finance, Universidad de Talca, Chile, rpasten@utalca.cl Eugenio Figueroa B., Department of Economics, Universidad de Chile, Chile,
 
Suggested Citation
Roberto Pasten and Eugenio Figueroa B. (2012), "The Environmental Kuznets Curve: A Survey of the Theoretical Literature", International Review of Environmental and Resource Economics: Vol. 6: No. 3, pp 195-224. http://dx.doi.org/10.1561/101.00000051

Published: 21 Dec 2012
© 2012 R. Pasten and E. Figueroa
 
Subjects
Environmental Economics
 
Keywords
C23Q53Q58
Environmental Kuznets curveElasticity of substitutionEconomic growth
 

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In this article:
1 Introduction
2 A General Theoretical Framework for the EKC
3 EKC Driven by Technology (With Abatement Expenditures)
4 EKC Driven by Preferences (The Income Effect)
5 Deriving the Environmental Kuznets Curve
6 Conclusions
Acknowledgements
Appendix A
References

Abstract

This paper reviews and summarizes most of the literature on the environmental Kuznets curve (EKC), focusing mainly on disentangling and clarifying the key concepts underlying the two classes of existing theoretical explanations for the EKC occurrence — those driven by technology and those driven by preferences — as well as the technical formalization of such concepts. To do this, we develop a model which allows the analysis of the two types of theoretical explanations under a common theoretical framework. Using this analytical setting, we first review models with technology as the main driver of the EKC, and then we study those with preferences as the fundamental driver. Finally, we present a closed form solution for the EKC which, on the one hand, is simpler and less restrictive than previous ones in the literature and, on the other hand, helps us to highlight some of the remaining theoretical gaps and to propose some possibilities for future research.

DOI:10.1561/101.00000051