| This thesis focuses on examining whether the relationship between environmental quality and economic growth follows the trajectory of an inverted U curve, or commonly termed the Environmental Kuznets Curve (EKC). There are mainly two tasks undertaken in this research. One is to develop a theoretical model, in which economic growth theory is adopted to analyze the path of such environment-growth relationship. In developing the theoretical model, this research differentiates pollution as stock or as flow depending on the depreciation rate of the studied pollutant. Particularly, two environmental growth models are formulated for pollution treated as flow or as stock. In the pollution as stock case, besides the equation of motion of capital stock in production sector, another equation of motion of pollution stock is also formed as a constraint to decide the optimal utility. As a result, optimal solutions to the environmental growth models are evaluated and transitional dynamics are analyzed. Besides, conditions on the existence of EKC and income levels of the environmental turning point (ETP) are analyzed theoretically.; The second task of this research is to verify the EKC relationship between economic growth and environmental quality using empirical data sets, for which three level studies, global, regional, and individual country, are conducted. In the empirical research, statistical methods are extensively employed, and a general econometric model is developed on the base of theoretical results from the environmental growth models. This econometric model is used to estimate the income levels of ETP, and the underlying causes that determine the existence of EKC for the three geographical levels of the study. Emissions of six major air pollutants are applied to represent the environmental quality. The income level, represented by GDP per capita, indicates the impact of economic scale on the environment, from which ETP can be derived and thus the existence of EKC can be evaluated. Furthermore, economic structural impacts of both compositional and decompositional effects on the environmental quality are analyzed, among which impacts of technological innovation, inter-sectoral and intra-sectoral changes, and environmental policy response, are particularly focused. |
