The evolution of the environmental Kuznets curve hypothesis assessment: A literature review under a critical analysis perspective

Environmental changes based on factors like urbanization, population, economic growth, increase in energy consumption, and agricultural intensification are never far from the top of any agenda. The topics of environ-mental degradation and climate change cannot be confined to a single country or region but need to be addressed on a global scale. If the focus is on the relationship between environmental degradation and economic growth, then one hypothesis that is comprehensively used as an empirically model is the widely known Environmental Kuznets Curve. A substantial amount of research has been published about the Environmental Kuznets Curve, and this present study provides a detailed and extensive literature review of more than 200 articles from 1998 to 2022 to explain and assess its evolution. This literature review provides in detail the Environmental Kuznets Curve relationship under analysis, the additional variables included, the type of analysis and methods performed, the relationships obtained, and if the turning point is calculated. Furthermore, this comprehensive literature points out critical issues and gaps in the Environmental Kuznets Curve analysis. It is important to note that there are components that are not considered in the Environmental Kuznets Curve analysis. The Environmental Kuznets Curve only focuses on production and overlooks the impact of the consumption of imported goods on the envi-ronment. Consequently, environmental improvements from technological progress will be offset, and economic growth will result in more environmental degradation. This goes against the change in consumer behaviour which occurs with a rise in income, which is one basic assumption of the Environmental Kuznets Curve. The relocation of pollutant industries and consequent relocation of emissions could distort the emissions trajectory over the eco-nomic growth path and is also not considered in the Environmental Kuznets Curve analysis. On the other hand, the growth path traced by the inverted U-shaped is not efficient, and the environmental damage provoked in the first phases of the EKC might not be repairable. Therefore, technological progress, climate finance, and energy transition could improve the Environmental Kuznets Curve assessment.

Automated summary

Environmental changes are closely related to factors like urbanization, population, economic growth, energy consumption, and agricultural intensification. Environmental degradation and climate change are global issues that need to be addressed on a global scale. The Environmental Kuznets Curve is a widely used model to explain the relationship between environmental degradation and economic growth. However, it has limitations and there are factors that are not considered in its analysis. Further improvements in technology, climate finance, and energy transition could enhance the assessment of the Environmental Kuznets Curve.