Economic growth as a cause of environmental degradation: the Australian experience

In the presence of more than one scenario on the interaction of growth, environmental regulation and environmental quality, it is unclear what shape is assumed by the relation between environmental degradation and income per capita (that is, the environmental Kuznets curve). Evidence based on Australian data is presented, suggesting that the environmental Kuznets curve EKC is valid for carbon dioxide, in the sense that an inverted U-shaped curve is observed for several measures of CO2 emissions. The results, however, cannot be generalized because the relation between environmental degradation and income per capita is time-varying and country-specific. It also depends on how environmental degradation and income per capita are measured.