How is environmental performance associated with economic growth? A world cross-country analysis

Open access


The aim of the paper is to explore the association between environmental performance and income level in the world economy in 2016. Data from Yale University and World Bank are used in a cross-country regression analysis comprising 166 countries. The gross Domestic Product per capita (based in purchased power parity, constant 2011 international dollars) in these countries is positively associated with the environmental performance index (EPI) calculated by Yale and Columbia University in 2016. Furthermore, the causality of this relationship is from GDP per capita to Environmental Performance and both Environmental Health (EH) and Ecosystem Vitality (EV) are positively associated with GDP per capita. Environmental Health (EH) is stronger related to GDP per capita, meaning that investments in public health, sanitation and infrastructure are increasing as countries develop.

If the inline PDF is not rendering correctly, you can download the PDF file here.

  • 1. Ardelean D.I. David D. (2013). The reflection of the cost-efficiency coefficient of the environment policies in the European Union and the Member States. Studia Universitatis “Vasile Goldiș” Arad Economic Series Vol.23 Issue 3 pp.14-20.

  • 2. Bertinelli L. Strobl E. (2005). The environmental Kuznets curve semi-parametrically revisited. Economics Letters Vol.88 pp.350–357.

  • 3. Bimonte S. (2002). Information access income distribution and the Environmental Kuznets Curve. Ecological Economics Vol.41 Issue 1 pp.145–156.

  • 4. Booth H. (2017). The Environmental Kuznets Curve. The validity of Kuznets Curve and its Policy Implications. World Economics Vol.18 No.1 pp.145-152.

  • 5. Bulte E.H. van Soest D.P. (2001). Environmental degradation in developing countries: households and the (reverse) environmental Kuznets curve. Journal of Development Economics Vol.65 pp.225–235.

  • 6. Cole M.A. Rayner A.J. Bates J.M. (1997). The Environmental Kuznets Curve: an empirical analysis. Environment and Development Economics Vol.2 pp.401–416.

  • 7. Caviglia-Harris J.L. Chambers D. and Kahn J.R. (2009). Taking the ‘U’ out of Kuznets-A Comprehensive analysis of the EKC and environmental degradation. Ecological Economics Vol. 68 pp. 1149–1159.

  • 8. de Bruyn S.M. van den Bergh J.C.J.M. Opschoor J.B. (1998). Economic growth and emissions: reconsidering the empirical basis of environmental Kuznets curves. Ecological Economics Vol.25 pp.161–175.

  • 9. Dinda S. (2004). Environmental Kuznets Curve Hypothesis: A Survey. Ecological Economics Vol.49 Issue 4 pp.431-455.

  • 10. Dinda S. (2005). A theoretical basis for the environmental Kuznets curve. Ecological Economics Vol.53 pp.403-413.

  • 11. Grossman G. and Krueger A. (1995). Economic Growth and the Environment. The Quarterly Journal of Economics Vol.110 Issue 2 pp.353-377.

  • 12. Holtz-Eakin D. Selden T.M. (1992). Stoking the fires? CO2 emissions and economic growth. NBER Working Paper 4248.

  • 13. Harbaugh W. Levinson A. Wilson D. (2002). Re-examining the empirical evidence for an environmental Kuznets curve. The Review of Economics and Statistics Vol. 84 pp.541–551.

  • 14. Hsu A. et al. (2016). 2016 Environmental Performance Index. New Haven CT: Yale University. Available: Accessed 17 June 2017.

  • 15. Islam N. (1997). Income-Environment Relationship. How different is Asia? Asian Development Review Vol.15.No.1 pp.18-51.

  • 16. Islam N. Vincent J. Panayotou T. (1998). Unveiling the Income-Environment Relationship: An Exploration into the Determinants of Environmental Quality. Available at: Accessed 10 July 2017.

  • 17. Jha R. & Murthy. KVB (2003). An Inverse Global Environmental Kuznets Curve. Journal of Comparative Economics Vol.31 Issue 2 pp. 352–368.

  • 18. Kuznets S. (1955). Economic growth and economic inequality. American Economic Review Vol.45 pp.1-28.

  • 19. Lee J. List J.A. (2004). Examining trends of criteria air pollutants: ere the effects of government intervention transitory?. Environmental and Resource Economics Vol.29 21–37

  • 20. Moomaw W.R. Unruh G.C. (1997). Are Environmental Kuznets curves misleading us? The case of CO2 emissions. Environment and Development Economics Vol.2 pp.451–463.

  • 21. Munasinghe M. (1999). Is environmental degradation an inevitable consequence of economic growth: tunneling through the environmental Kuznets curve. Ecological Economics Vol.29 Issue 1 pp. 89 – 109.

  • 22. OECD (2003). OECD Environmental Indicators. Development Measurement and Use. Available at: Accessed 1 July 2017.

  • 23. Panayotou T. (1997). Demystifying the Environmental Kuznets Curve: Turning a Black Box into a Policy Tool. Available at: Accessed 4 July 2017.

  • 24. Perman R. Stern D.I. (2003). Evidence from panel unit root and cointegration tests that the Environmental Kuznets Curve does not exist. The Australian Journal of Agricultural and Resource Economics Vol.47 pp.325–347

  • 25. Saboori B. Sulaiman J. and Mohd S. (2011). Economic growth and CO 2 emissions in Malaysia: a cointegration analysis of the environmental Kuznets curve. Energy Policy Vol.51 pp.184-191.

  • 26. Selden T.M. Song D. (1994). Environmental quality and development: is there a kuznets curve for air pollution emissions?. Journal of Environmental Economics and Management Vol. 27 Issue2 pp.147–162.

  • 27. Selden T.M. Song D. (1995). Neoclassical growth the J curve for abatement and the inverted U curve for pollution. Journal of Environmental Economics and Management Vol.29 Issue 2 pp.162–168.

  • 28. Shahbaz M. Lean H.H. and Shabbir M.S. (2012). Environmental Kuznets Curve Hypothesis in Pakistan: Cointegration and Granger Causality. Renewable and Sustainable Energy Reviews Vol 16 pp. 2947–2953.

  • 29. Shafik N. and Bandyopadhyay S. (1992). Economic Growth and Environmental Quality-Time Series and Cross-Country Evidence. World Bank Policy Research Working Paper WPS 904.

  • 30. Shafik N. (1994). Economic development and environmental quality: an econometric analysis. Oxford Economic Papers Vol.46 pp.757–773.

  • 31. Shen J. (2006). A simultaneous estimation of Environmental Kuznets Curve: Evidence from China. China Economic Review Vol 17 pp. 383–394.

  • 32. Seppälä T. Haukioja T. and Kaivo-oja J. (2001). The EKC Hypothesis Does Not Hold for Direct Material Flows: Environmental Kuznets Curve Hypothesis Tests for Direct Material Flows in Five Industrial Countries. Population and Environment Vol 23 Issue2 pp. 217-238.

  • 33. Stern D.I. (1998). Progress on the environmental Kuznets curve?. Environment and Development Economics Vol.3 Issue 2 pp.173–196.

  • 34. Stern D.I. Common M.S. (2001). Is there an environmental Kuznets curve for sulphur?. Journal of Environmental Economics and Management Vol.41 pp.162–178.

  • 35. Stern D.I. (2004). The Rise and Fall of Environmental Kuznets Curve. World Development Vol.32 No.8 pp.1418-1439.

  • 36. Taguchi H. (2012). The Environmental Kuznets Curve in Asia: The Case of Sulphur and Carbon Emissions. Asia-Pacific Development Journal Vol 19 pp. 77–92.

  • 37. Tisdell C. (2001). Globalisation and sustainability: environmental Kuznets curve and the WTO. Ecological Economics Vol.39 Issue 2 pp.185–196.

  • 38. Tiwari A.K. Shahbaz M. and Hye Q.M.A. (2013). The Environmental Kuznets Curve and the Role of Coal Consumption in India: Cointegration and Causality Analysis in an Open Economy. Renewable and Sustainable Energy Reviews Vol 18 pp. 519–527.

  • 39. UNDP. (2016). Human Development Report 2016. Human Development for Everyone. Washington DC USA.

  • 40. Accessed 30 June 2017

  • 41. Accessed 30.06.2017

Journal information
Cited By
All Time Past Year Past 30 Days
Abstract Views 0 0 0
Full Text Views 463 204 14
PDF Downloads 257 158 16