scholarly journals Does the digital finance revolution validate the Environmental Kuznets Curve? Empirical findings from China

PLoS ONE ◽  
2022 ◽  
Vol 17 (1) ◽  
pp. e0257498
Author(s):  
Kaiyang Zhong

In recent years, digital finance has become a crucial part of the financial system and reshaped the mode of green finance in China. Digital finance has brought certain impact on economic growth, industrial structure, and resident income, which may affect pollution. The nexus of digital finance and environment in China is thus worth exploring. By revising the traditional Environmental Kuznets Curve model with income inequality variable, this paper decomposes the environmental effects of economic activities into income growth effect, industrial structure effect and income inequality effect, and use panel data of China’s provinces to conduct an empirical analysis. The results reveal the following: (1) the Environmental Kuznets Curve is still valid in sample, and digital finance can reduce air and water pollution (as measured through SO2 and COD emission) directly; (2) in the influence mechanism, digital finance can alleviate income inequality and promote green industrial structure, thus reducing pollution indirectly, but the scale effect of income growth outweighs the technological effect, which increases pollution indirectly; and (3) digital finance has a threshold effect on improving the environment, then an acceleration effect appears after a certain threshold value. From the regional perspective, digital finance development in eastern regions is generally ahead of central and western regions, and the effects of environmental improvement in the eastern regions are greater. According to the study, this paper suggest that digital finance can be an effective way to promote social sustainability by alleviating income inequality and environmental sustainability by reducing pollution.

1997 ◽  
Vol 29 (5) ◽  
pp. 805-830 ◽  
Author(s):  
P Ekins

Recent research has examined the relationship between certain indicators of environmental quality and income, concluding on the basis of econometric estimation that in some cases an inverted-U relationship, which has been called an environmental Kuznets curve (EKC), exists between these variables. There has been speculation on the implications of this for economic and environmental policy. In this paper I examine this research as a whole and find that unequivocal evidence for an EKC relationship is very scant; that there are important indicators which show a monotonically increasing relationship; that even where there may be an EKC relationship, most of the world's population is still on the section of the curve that is increasing, so that growth in income on the basis of this relationship would result in considerable further environmental damage; and that reviews of overall environmental quality even in the richest countries show that it is still declining. I conclude that from the point of view of environmental sustainability the income—environment relationship is still very problematic and that determined environmental policy will be required if future income growth is to be compatible with sustainable development.


2021 ◽  
Vol 13 (3) ◽  
pp. 1228
Author(s):  
Javier Arnaut ◽  
Johanna Lidman

The environmental Kuznets curve (EKC) hypothesis assumes there is an inverted U-shape relationship between pollution and income per capita, implying an improvement in environmental quality when a growing economy reaches a high level of economic development. This study evaluated empirically the existence of the environmental Kuznets curve in Greenland for the period 1970–2018. Using an autoregressive distributed lag (ARDL) approach, the results show evidence of a U-shaped EKC in Greenland instead of the hypothesized inverted U-shape. The findings indicate that Greenland had initially experienced a decoupling transition during an early development stage associated with structural conditions of a small subsistence economy. However, once the country began to expand its industry, the trend began to reverse, creating a positive and significant relationship between CO2 emissions and GDP per capita that is potentially detrimental to the Arctic natural environment.


2020 ◽  
Vol 202 ◽  
pp. 03023
Author(s):  
Andryan Setyadharma ◽  
Shanty Oktavilia ◽  
Yayu Tika Atmadani ◽  
Indah Fajarini Sri Wahyuningrum

Natural resources play as vital inputs for economic activities, mainly in developing countries. However, massive use of natural resources puts more pressure on the environment and as the result, the quality of environment is deteriorating. The body of economic literature have shown that income is associated with harm to the natural environment. The relationship between income and degradation of the environment is known as the Environmental Kuznets Curve (EKC) hypothesis. Previous studies of EKC hypothesis in Indonesia are still limited and the results are inconclusive due to different results. Therefore, the aim of this study is to present a new insight of the existence of EKC in Indonesia using different method. Most of previous studies of EKC in Indonesia employ Autoregressive distributed lag (ARDL) method, while this study uses data panel regression method from 33 provinces in Indonesia during 2012 to 2018. The result confirms the existence of EKC hypothesis in Indonesia. This study also estimates the turning point, a level of income that starts give positive impact on the environment. This result gives new insight to the existing literature. The policy implication for policymakers are straightforward, i.e. improve wealth of the society through higher income for the protection of the environment.


2013 ◽  
Vol 807-809 ◽  
pp. 773-782
Author(s):  
Qing Song Li ◽  
Kai Kang ◽  
Jia Wei Zhu ◽  
Qing Xiang Meng ◽  
Su Jun Deng

The study set up the model of per capita GDP and the environmental index based on the Environmental Kuznets Curve (EKC) with the support of SPSS software and the 2003-2011 economics and environment data of Puyang City. And the result shows that the environmental Kuznets Curve (EKC) of industrial wastewater discharge and industrial sulfur dioxide emissions both display inverted U-shape; and just across the turning point, the discharge present downward trend with the increasing of per capita GDP; while the EKC of industrial fumes emissions display positive U-shape, and its emission present upward trend first and then downward with the increasing of per capita GDP. It shows that the environmental problems of Puyang City has partly improved, but has not been fully restrained. The main reasons are unreasonable industrial structure, single dominated industy and relatively low investment on environmental improvement.


2018 ◽  
Vol 30 (3) ◽  
pp. 444-461 ◽  
Author(s):  
Caner Demir ◽  
Raif Cergibozan ◽  
Adem Gök

The aim of the study is to investigate the impact of income inequality on environmental quality in Turkey within the Environmental Kuznets Curve framework. In order to observe the short-run and long-run effects of income inequality on environmental quality, an autoregressive distributed lag bounds test on CO2 emission has been employed for the period 1963–2011 of Turkey. The results of the analysis reveal that there is a negative association between CO2 emission level and income inequality, which implies that increasing income inequality reduces environmental degradation in Turkey. Hence, a greater inequality in the society leads to less aggregate consumption in the economy due to lower propensity to emit in the richer households resulting in better environmental quality. The findings confirm an argument in the existing literature, which suggests that for developing countries, until a certain level of development, environmental degradation increases as income inequality in the society decreases. The results also confirm the Environmental Kuznets Curve hypothesis.


2010 ◽  
Vol 1 (2) ◽  
pp. 31-39 ◽  
Author(s):  
Folorunso Sunday Ayadi

The possibility of the existence of environmental Kuznet curve (EKC) has been debated extensively in the literature. The reality of EKC is that, by pursuing growth in income, environmental objectives can be simultaneously accomplished without initiating extra intervention tools. Various studies have been conducted on the existence of EKC without any consensus. Therefore, in this paper, the author analyzes whether or not EKC exists and its shape. In this study, the author uses an explanatory variable to in the model, which is population density, showing the level of resilience of the environment to pollution. However, this research found that at the lower stage of income, environmental degradation declined with income growth, rises as income grew further, then declined. However, income did not contribute significantly toward the explanation of environmental degradation like population density. This research found no synergies between addressing poverty and environmental problems in Nigeria. Therefore, complementary environmental policies must be put in place when addressing poverty. Lastly, there are different shapes of the relationship between income growth and various measures of pollution and environmental degradation, and developing countries must recognize that no one size fits all in this relationship.


Author(s):  
Xiaohong Chen ◽  
Guodong Yi ◽  
Jia Liu ◽  
Xiang Liu ◽  
Yang Chen

This research utilizes the environmental Kuznets curve to demonstrate the interrelationship between economic growth, industrial structure, and water quality of the Xiangjiang river basin in China by employing spatial panel data models. First, it obtains two variables (namely, CODMn, which represents the chemical oxygen demand of using KMnO4 as chemical oxidant, and NH3-N, which represents the ammonia nitrogen content index of wastewater) by pretreating the data of 42 environmental monitoring stations in the Xiangjiang river basin from 2005 to 2015. Afterward, Moran’s I index is adopted to analyze the spatial autocorrelation of CODMn and NH3-N concentration. Then, a comparative analysis of the nonspatial panel model and spatial panel model is conducted. Finally, this research estimates the intermediate effect of the industrial structure of the Xiangjiang river basin in China. The results show that spatial autocorrelation exists in pollutant concentration and the relationship between economic growth and pollutant concentration shapes as an inverted-N trajectory. Moreover, the turn points of the environmental Kuznets curve for CODMn are RMB 83,001 and RMB 108,583 per capita GDP. In contrast, the turn points for NH3-N are RMB 50,980 and RMB 188,931 per capita GDP. Additionally, the environmental Kuznets curve for CODMn can be explained by industrial structure adjustment, while that for NH3-N cannot. As a consequence, the research suggests that the effect of various pollutants should be taken into account while making industrial policies.


Author(s):  
Haiqian Ke ◽  
Wenyi Yang ◽  
Xiaoyang Liu ◽  
Fei Fan

Innovation is an important motivating force for regional sustainable development. This study measures the innovation efficiency of 280 cities in China from 2014–2018 using the super-efficiency slack-based measure and it also analyzes its impact on the ecological footprint using the generalized spatial two-stage least squares (GS2SLS) method and uses the threshold regression model to explore the threshold effect of innovation efficiency on the ecological footprint at different economic development levels. We find the corresponding transmission mechanism by using a mediating effect model. The major findings are as follows. First, we find an inverse U-shaped relationship between innovation efficiency and the ecological footprint for cities across China as well as in the eastern and central regions. That is, innovation efficiency promotes then suppresses the ecological footprint. Conversely, in western and northeastern China, improvements in innovation efficiency still raise the ecological footprint. Second, for the entire country, as economic development increases from below one threshold value (4.4928) to above another (4.8245), the elasticity coefficient of innovation efficiency to the ecological footprint changes from −0.0067 to −0.0313. This indicates that the ability of innovation efficiency improvements to reduce the ecological footprint is gradually enhanced with increased economic development. Finally, the industrial structure, the energy structure, and energy efficiency mediate the impacts of innovation efficiency on the ecological footprint.


2006 ◽  
Vol 11 (6) ◽  
pp. 697-707 ◽  
Author(s):  
FLORENZ PLASSMANN ◽  
NEHA KHANNA

In a widely cited paper, Andreoni and Levinson (2001) argue that, under very mild restrictions on preferences, increasing returns to scale in pollution abatement are a sufficient condition for pollution to ultimately fall to zero with income growth. We show that the existence of an Environmental Kuznets Curve depends on the relative magnitudes of the returns to scale in abatement and in gross pollution, rather than on their absolute values. Increasing returns to scale in abatement by themselves are not sufficient for pollution to fall with income unless the returns to scale of abatement exceed the returns to the production of gross pollution.


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