Environmental Quality and Economic Growth

This paper uses 5-year non-overlapping emissions growth equations for sulphur and carbon dioxide to estimate the impact of economic growth on environmental quality. It is shown that the impact of economic growth on emissions growth depends on the level of income. Economic growth reduces emissions once a country reaches a certain level of income, a conclusion that seems to support the environmental Kuznets Curve Hypothesis both in the direction of the impact as well as in the estimated income level. This paper also suggests that demand for environmental quality depends on the level of environmental damage. The significance of other variables (e.g. black market premium or tariffs on imports) suggests that there might be some 'win-win' situations: reducing these variables is advantageous for both economic growth and environmental quality