Does Salvaging the Environment Require Economic Growth

We examine the determinants of environmental quality by using carbon dioxide emission levels as a proxy for environmental degradation. Our confirmatory, but different approach to analyzing Environmental Kuznets Curve (EKC) patterns in the data yield results that do not always agree with those found in the literature, which itself has no conclusive answer as to whether an EKC exists. We find that a log-linear form best models variations in carbon dioxide (CO2) levels for each of the years 1970 and 2007 for the given cross-section of countries. We also note from the cross-sectional regressions that, in 1970, environmental degradation followed a linear trajectory given increasing income levels, but analysis of 2007 data reveals that an N-shaped environmental hypothesis of two inflection points is supported. The panel analysis uncovers similar results including a positive relationship between the Human Development Index (HDI) and environmental degradation; thus leading one to argue that as countries become wealthier, the rate of environmental degradation no longer remains invariable.