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The Environmental Kuznets Curve.

This paper chronicles the story of the environmental Kuznets curve (EKC).

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The Environmental Kuznets Curve

The Composition of the Economic Activity Different sectors of the economy have differential pollution and resource use intensities. Industry, especially manufacturing, tends to be more pollution intensive than either agriculture or services. The share of industry in a nations gross domestic product () first rises with economic growth and then declines as the country moves from the preindustrial to the postindustrial stage of development. This influence encourages an inverted U-shaped relationship between environmental pollution and income level.

The Environmental Kuznets Curve in Poland will be available on

The paper is an effort to fill the gap in the energy literature with a comprehensive country study of Pakistan. We investigate the relationship between CO 2 emissions, energy consumption, economic growth and trade openness in Pakistan over the period of 1971-2009. Bounds test for cointegration and Granger causality approach are employed for the empirical analysis. The result suggests that there exists a long-run relationship among the variables and the Environmental Kuznets Curve (EKC) hypothesis is supported. The significant existence of EKC shows the country's effort to condense CO 2 emissions and indicates certain achievement of controlling environmental degradation in Pakistan. Furthermore, we find a one-way causal relationship running from economic growth to CO 2 emissions. Energy consumption increases CO 2 emissions both in the short and long runs. Trade openness reduces CO 2 emissions in the long run but it is insignificant in the short run. In addition, the change of CO 2 emissions from short run to the long span of time is corrected by about 10% yearly.

An inverted U-shaped curve is obtained in the case of PM10.

Revisiting the Environmental Kuznets Curve Hypothesis.” Working Paper WP0207

The environmental Kuznets curve (EKC) hypothesis proposes that there is an inverted U-shape relation between environmental degradation and income per capita.

Bangladesh, a south Asian least developed country, has been experiencing severe deforestation over the last 3 to 4 decades. Still, Bangladesh has not found any effective way to halt the deforestation. It hypothesizes that Bangladesh is presently at the initial up-facing stage of EKC considering deforestation. Many studies were found to judge the EKC for deforestation in different developing countries (, , ). While studying the economic impacts on deforestation at a global level, Scrieciu () concluded that case-specific factors might influence deforestation in different countries and socio-geographic zones. Therefore, he focused his research on a more disaggregate, local level. However, there is no validly published study of EKC on deforestation in Bangladesh. This study aimed at relating the results of EKC for other developing countries with Bangladesh. What will be the fate of the deforestation of Bangladesh in regards to ongoing economic development? Will Bangladesh follow the inverted U-shape of the EKC? If yes, what should be the economic and environmental policy to retard deforestation within a shorter period? We expect this paper will contribute significantly to this environmental issue. The findings of the study would be of immense importance for the forestry development in Bangladesh.

“Introduction to the environmental Kuznets curve

These results question the long-term global applicability of the Environmental Kuznets Curve.

It is generally assumed that the Environmental Kuznets Curve relationship between pollution and income is due to the combined effects of economic scale, composition, technical change, trade policy, and consumer demand for environmental quality.

Unbiased expectations hypothesis: The hypothesis that forward exchange rates are unbiased predictors of future spot rates. (See forward parity.)
Unbiased Nature of the Forward Rate (UFR): States that the forward rate should reflect the expected future spot rate on the date of settlement of the forward contract.
Uncertainty avoidance: The extent to which a society tolerates uncertainty and ambiguity.
Uncertainty: Lack of information. Failure to know anything that may be relevant for an economic decision, such as future variables, details of a technology, or sales. In models, uncertainty usually appears as a random variable and corresponding probability density function. But in practice, most international models, especially of trade, assume certainty.
Uncovered interest parity: Equality of expected returns on otherwise comparable financial assets denominated in two currencies, without any cover against exchange risk. Uncovered interest parity requires approximately that i = i* + a where i is the domestic interest rate, i* the foreign interest rate and the expected appreciation of foreign currency at an annualized percentage rate.
Underemployment: The employment of workers for fewer hours or in less desirable jobs than they would prefer and are qualified for.
Under-invoicing: The provision of an invoice that states price as less than is actually being paid. This might be done on an import in order to reduce the amount that will be collected by an ad valorem tariff. Or it might be done on an export to reduce apparent profit and thus taxes.
Under-valued currency: The situation of a currency whose value on the exchange market is lower than is believed to be sustainable. This may be due to a pegged or managed rate that is below the market-clearing rate, or, under a floating rate, it may be due to speculative capital outflows. It contrasts with over-valued currency.
Underwriting syndicate: A temporary combination of investment banking firms formed to sell a new security issue.
Underwriting: Bearing the risk of not being able to sell a security at the established price by virtue of purchasing the security for resale to the public; also known as firm commitment underwriting. The act by investment bankers of purchasing securities from issuers for resale to the public.
Unemployment Rate: The ratio of the total number of unemployed persons to the total number of persons in the labor force. The ratio of unemployment to the labor force of a country.
Unequal exchange: Trade in which the labor used to produce a country's exports is more than the labor used to produce its imports, as in the exchange between low-wage developing countries and high-wage developed countries.
Unfair trade:
1. Under the GATT this refers only to exports that are subsidized or dumped
2. Under U.S. law, this also includes various actions that interfere with U.S. exports.
3. Also used to refer to any almost any trade that the speaker objects to, sometimes including that based on low wages or weak regulations.
Uniform Commercial Code: The model state legislation related to many aspects of commercial transactions that went into effect in Pennsylvania in 1954. It has been adopted with limited changes by most state legislatures.
Unit contribution margin: The amount of money available from each unit of sales to cover fixed operating costs and provide operating profits.
Unit elastic: Having an elasticity equal to one. For a price elasticity of demand, this means that expenditure remains constant as price changes. For income elasticity it means that expenditure share is constant. Homothetic preferences imply unit income elasticities. It contrasts with elastic and inelastic.
Unit isocost line: An isocost line along which cost is equal to one unit of the numeraire, such as one dollar.
Unit isoquant: The isoquant for a quantity equal to one unit of a good. The unit isoquant is useful for relating the price of a good to the prices of factors employed in its production.
Unit labor requirement: The amount of labor used per unit of output in an industry; the ratio of labor to output. In a Heckscher-Ohlin Model this varies along an isoquant as different techniques are chosen in response to different factor prices. But in a Ricardian model, these are the constant building blocks for defining comparative advantage and determining behavior.
Unit of account: A basic function of money, providing a unit of measurement for defining, recording, and comparing value. I.e., one dollar signifies not only a one dollar bill, but also a dollar's worth of money in other forms (deposits), of wealth in other forms than money, and of any good or service with a market value.
United Currency Options Market (UCOM): Market set up by the Philadelphia Stock Exchange in which to trade currencies.
United Nations Organizations: The complex and extensive system of organizations that exist under the umbrella of the United Nations. Several of these, like the WTO and the IMF, play critical roles in the international economy.
Unit-value isoquant: The isoquant for a quantity of a good worth one unit of value. This is meaningful only if the nominal price of the good is given, for some specified currency or numeraire. Unit-value isoquants are central to the Lerner diagram for analyzing the Heckscher-Ohlin Model.
Universal Banking: Bank practice, especially in Germany, whereby commercial banks perform not only investment banking activities equity positions in companies.
Unlevered beta (systematic business risk): The beta (or systematic risk) of a project as if it were financed with 100 percent equity.
Unlevered cost of equity: The discount rate appropriate for an investment assuming it is financed with 100 percent equity.
Unnatural trading bloc: A trading bloc among countries that are not natural trading partners.
Unsecured loans: A form of debt for money borrowed that is not backed by the pledge of specific assets.
Unskilled labor: Labor with a low level of skill or human capital. Identified empirically as labor earning a low wage, with a low level of education, or in an occupational category associated with these; sometimes crudely proxied as production workers.
Unsterilized Intervention: Foreign exchange market intervention in which the monetary authorities have not insulated their domestic money supplies from the foreign exchange transactions.
Unsustainable debt: A financial condition in which a country is unable to service its foreign (external) debt without decimating its economy.
Unsystematic (Diversifiable) Risk: Risks that are specific to a given firm, such as a strike. Risk that is specific to a particular security or country and that can be eliminated through diversification.
Unsystematic risk: The variability of return on stocks or portfolios not explained by general market movements. It is avoidable through diversification.
Up-and-In Option: An option that comes into existence if and only if the currency strengthens enough to cross a preset barrier.
Up-and-Out Option: An option that is canceled if the underlying currency strengthens beyond the outstrike.
Upstream subsidization: Export of a good one of whose inputs has been subsidized.
Usury: The practice of charging or paying exorbitant interest on a loan or other transaction. Note: in Islamic societies, charging or receiving any amount of interest is considered usury.
Utility function: A function that specifies the utility (usefulness, well being) of a consumer for all combinations goods consumed (and sometimes other considerations). It represents both their welfare and their risk preferences.
Utility possibility frontier: In a diagram with levels of individual utility on the axes, a curve showing the maximum attainable levels of utility in a given situation, such as free trade or autarky.

“Environmental Kuznets Curve Hypothesis: A
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  • “The Environmental Kuznets Curve:

    Kuznets Simon (1955). “Economic Growth and Income Inequality”, The American Economic Review, Vol. 45, No. 1, pp. 1-28.

  • “Progress on the environmental Kuznets curve?”,

    Levinson, "The Simple Analytics of the Environmental Kuznets Curve," Journal of Public Economics, Vol.

  • Kuznets curve hypothesis, - ThoughtCo

    "Environmental Kuznets Curves." International Encyclopedia of the Social Sciences. . (February 3, 2018).

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Environmental Kuznets Curve Hypothesis | SpringerLink

Azam Muhammad ve Khan Abdul Qayyum (2016). “Testing the Environmental Kuznets Curve hypothesis: A comparative empirical study for low, lower middle, upper middle and high income countries”, Renewable and Sustainable Energy Reviews, Vol. 63, pp. 556-567.

Environmental Kuznets Curve Hypothesis: A Survey | …

Alshehry Atef Saad, Belloumi Mounir (2017). “Study of the environmental Kuznets curve for transport carbon dioxide emissions in Saudi Arabia”, Renewable and Sustainable Energy Reviews, Vol. 75, pp. 1339-1347.

Environmental Kuznets Curve | Green Criminology

Abstract: Deforestation in the tropical developing countries is the critical environmental concern to ecologists and environmentalists. Environmental Kuznets Curve (EKC) hypothesis is critical to understanding the development path of a nation in relevance to its environment. The dictation of national economic growth to deforestation can be found through the study of EKC. To understand the EKC phenomena for deforestation, the study was undertaken through reviewing the literature. With the understanding of the different EKC trajectories for deforestation, an attempt was made to implicate the economic development of Bangladesh with the EKC. The proven EKC trajectories for deforestation in some regions/countries show a higher income per requirement for the turning point. The study suggests that tunneling in the EKC trajectory for Bangladesh would be favorable. The type of economic and forest policy that Bangladesh should follow to retard deforestation is also revealed. Clean Development Mechanism (CDM) and Reducing Emissions from Deforestation and forest Degradation (REDD) have been suggested for tunneling the EKC in Bangladesh. The findings of the study are expected to contribute to the environmental development of Bangladesh.

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