How Rapid Population Growth Ruined the Environmental Kuznets Curve

Kyle Richmond-Crosset

Population Explosion

The global human population in recent history is best measured using an exponential graph. In 12,000 BC, there were approximately one million humans living on earth. By 6,000 BC, the population had increased by a factor of ten, to 10 million humans. By 1,000 BC, the population had grown exponentially again, to 100 million humans. Sometime after 1800 AD, population reached one billion. As of 2016, the world population is approaching 7.5 billion people, and the United Nations estimates that the 10 billion people threshold will be reached sometime before 2060. (“International…”, 2016)

The human population graph is very likely nearing the end of its exponential growth; there is very little chance the human population will ever reach 100 billion people. In other words, the graph of global human population is nearing, or has just reached, an inflection point. That being said, the current population, especially in developing countries, continues to rapidly increase.

Scale Effect

Especially as the human population continues to grow, it is important to slow or reverse increasing environmental degradation. Any efforts to do so must recognize that the scale effect presents a serious hindrance. Essentially, the scale effect is the tendency of pollution and environmental degradation to grow at a rate proportional to population and economic growth. Without “change in the structure or technology of the economy,” more people, products, and services means more pollution (Stern, 2003).

Technique and Compositions Effect

The scale effect is countered by the technique and compositions effect, which is the tendency for economic growth to parallel improvements in productivity, policy, and technology that reduce pollution per unit of product (Stern, 2003). Together, the intensity of the scale, technique, and composition effects in an economy largely determine how environmental degradation changes with population, income, and economic growth.

Environmental Kuznets Curve

The Environmental Kuznets Curve (EKC) is one attempt to theorize how these effects influence environmental degradation at different stages in economic growth (Dasgupta, 2002). Specifically, the EKC is the “hypothesized relationship between various indicators of environmental degradation and income per capita” (Stern, 2003). Simon Kuznets first theorized about an inverse-U shaped relationship between income and income inequality in 1955, and his ideas were adapted in the early 1990s to apply to the environment (Dasgupta, 2003). Supporters of the EKC argue that the scale effect overwhelms improvements in technology and productivity during the first stages of economic development, when per capita income is low but population growth and economic growth are high. However, as per capita income rises, environmental degradation slows, and “in wealthy countries, growth is slower, and pollution reduction efforts can overcome the scale effect” (Stern, 2003). Thus, environmental degradation rises, and the falls, as per capita income increases.

The EKC theory is an optimistic theory, because it argues that a reduction in environmental degradation arises endogenously from economic growth. In other words, environmental problems will be resolved organically as nations become wealthier and per capita income rises (Sarigiannidou and Palivos, 2012).

There are two issues that cast doubt on the rosy future of the environment as portrayed by the EKC. First, in the past twenty years, some economists and environmentalists have begun to question whether the EKC exists altogether, arguing that there is little evidence for any dramatic rise and then fall of environmental degradation as per capita income rises over time (Stern, 2003). One analysis of past studies found significant errors and concluded that “the hypothesis that there is an EKC is not unequivocally supported for any environmental indicator” (Ekins, 1997). Another study found that “it seems unlikely that the EKC is a complete model of emissions or concentrations” (Stern, 2003). While the EKC is theoretically interesting, it is important to understand that the empirical evidence in support of the model is not robust.

Second, even if there is some factual evidence of the EKC, the per capita income required to begin to reduce environmental degradation is most likely greater than the global median income, and will be for a significant period of time. For example, a oft-cited 1994 study found that the turning point per capita income for sulfur dioxide was between $19,326 and $22,839 (adjusted for inflation to 2016) (Selden and Song). In 2013, Gallup estimated the world per capita median income to be $2,920 (“Worldwide…”). This suggests as of 2016, the world is still firmly on the left side of the EKC.

The above problems should give pause to those who believe that economic growth and wealth will parallel a reduction in emissions and successful efforts to reduce environmental degradation. It is not at all clear that the EKC is supported by very strong evidence, and even if the EKC exists, the evidence shows that emissions of pollutants and greenhouse gases will “continue growing at rapid rates through the first half of the next century” (Selden and Song, 1994). The EKC is most likely not a good prediction of the per capita income - environmental degradation relationship because it fails to account for the rapid growth in world population. This population growth is dramatically increasing the leverage of the scale effect and overwhelming any changes in productivity, policy, or technology.

There will most likely be about two billion more people on the earth in 2050 than in 2016 (“International…”, 2016). This will require even more intensive use of natural resources. Climate change could have a catastrophic impact on a planet-wide scale in the near-term future. The concentration of CO2 in the atmosphere is monotonically increasing. Even if the weak evidence the EKC rests on is accurate, the planet cannot wait fifty or thirty years for global per capita incomes to rise to a sufficient level; change must begin as soon as possible.

Works Cited

Dasgupta, Susmita. "Confronting the Environmental Kuznets Curve." The Journal of Economic Perspectives 16.1 (2002): 147-68. JSTOR. Web. 03 Dec. 2016.

Ekins, P. "The Kuznets Curve for the Environment and Economic Growth: Examining the Evidence." Environment and Planning A 29.5 (1997): 805-30. Web.

"International Programs, World Population." US Census Bureau, Demographic Internet Staff. United States Census Bureau, 27 Sept. 2016. Web. 03 Dec. 2016.

Sarigiannidou, Maria, and Theodore Palivos. "A Modern Theory of Kuznets’ Hypothesis." Texas Christian University (2012): n. pag. Jan. 2012. Web. 3 Dec. 2016.

Selden, Thomas M., and Daqing Song. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?" Journal of Environmental Economics and Management 27.2 (1994): 147-62. Web.

Stern, David I. "The Environmental Kuznets Curve." International Society for Ecological Economics (2003): n. pag. Print.

"Worldwide, Median Household Income About $10,000." Gallup Inc., 16 Dec. 2013. Web. 03 Dec. 2016.

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last updated 9/19/16