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Environmental Kuznets Curve

By :    May 2, 2018



  • GS Prelims, GS Mains paper III
  • Environment, Environmental Kuznets Curve, Industrial growth


What is Environmental Kuznets Curve:

  • As per the Environmental Kuznets Curve, the environment of an country degrades in the initial stages of industrial growth.
  • After a certain level of economic growth, the society begins to improve its relationship with the environment and levels of environmental degradation reduces.
  • The pollution reduces with greater protection of the environment, technological improvements, diversification of the economy from manufacturing to services, and increasing scarcity and prices of environmental resources, leading to lower consumption.
  • However, the opponents criticize this model. It is not certain that after a certain level of economic growth, the relation of society with the environment will improve or not.
  • It can be understood with the following curve:

Figure: Environmental Kuznets Curve

Indian case:

  • In developmental countries like India, pollution is increasing beyond the carrying capacity of the environment.
  • Natural resources are being over-exploited and there is indiscriminate discharge of waste in the environment.
  • Presently, India is on the upper side of the EKC. In order to attain sustainable development, we have to move to the second stage of the curve.
  • India is on the upward part of the EKC. For achieving sustainable development, it must move to the second stage.

Why is this cause of concern?

  • India can’t ignore the environmental consequences of its rapid growth.
  • Over the last few decades, water-intensive and polluting industries such as textiles, leather, sugar and paper have shifted from developed to developing countries.
  • They withdraw huge quantities of water and discharge effluents without adequate treatment.
  • Before 1980, countries like the U.K. and the U.S. played a vital role in textile production and export.
  • But by 2000, their dominance had substantially reduced and the share of developing countries like India and China had increased.
  • One of the factors attributed to this shift is that there are relatively less stringent environmental policies in developing nations.
  • Countries like India are now manufacturing products which contribute to pollution for domestic and international markets.

What is the cost of pollution?

  • Health: At the household level, the economic loss on account of pollution includes the cost of treatment and wage loss during sickness.
  • Agriculture: Pollution impacts ecosystems and related economic activities like agriculture and livestock.
  • Climate change: Air pollution causes climate change. Hence, pollution leads to the real and potential loss of the overall development opportunity in an economy.
  • Vulnerable sections: Generally, pollution impacts the socially vulnerable and poor communities more due to their weak coping options.
  • When traditional drinking water sources get contaminated, the rich can buy packaged water.
  • But the poor cannot afford it and are hence compelled to use contaminated water. They are also less aware of the health hazards caused by pollution.
  • Remedial measures
  • The ‘polluters pay’ principle should be in force. For the most part, polluters are not willing to internalise the external and social costs.
  • Pollution is also neglected by funding agencies worldwide and by governments in budgets.
  • However, experiences from the U.S. and Europe reveal that pollution mitigation can yield large gains to human health and the economy.
  • There should be public awareness about its consequences, adequate pollution-linked databases, integration of pollution prevention policies into the development sector, strict enforcement of pollution control policies, eco-friendly inputs in production, reliance on renewable energy, introduction of market-based/economic instruments (charges/taxes/levies, tradable permits, subsidies and soft loans), and increase in ecosystem resilience through the conservation of biodiversity.




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