The inverted U
Grossman and Krueger (1995) and Selden and Song (1994) found turning points; the name echoes Kuznets's (1955) inequality curve.
Why it bends
Panayotou (1997) cites scale, composition and technique effects; rising demand for clean air brings regulation such as Pigouvian taxes.
Critiques
Stern (2004, 2017) finds weak evidence, especially for CO₂; Dasgupta et al. (2002) note shifting curves. Growth alone does not fix market failure.
FAQ
- What is it in simple terms?
- Pollution rises as countries industrialise, then falls as they get richer.
- Will growth solve climate change?
- Unlikely; carbon emissions do not reliably fall with income.
Sources reviewed: 2026-10-26
References
- Grossman, G. M., & Krueger, A. B. (1995). Economic growth and the environment. Quarterly Journal of Economics, 110(2), 353–377. The landmark paper reporting inverted-U links between income and several pollutants.
- Selden, T. M., & Song, D. (1994). Environmental quality and development: Is there a Kuznets curve for air pollution emissions? Journal of Environmental Economics and Management, 27(2), 147–162. An early estimate of turning points for air-pollution emissions.
- Panayotou, T. (1997). Demystifying the environmental Kuznets curve: Turning a black box into a policy tool. Environment and Development Economics, 2(4), 465–484. Decomposes the curve into scale, composition and technique effects, stressing policy.
- Dasgupta, S., Laplante, B., Wang, H., & Wheeler, D. (2002). Confronting the environmental Kuznets curve. Journal of Economic Perspectives, 16(1), 147–168. Weighs optimistic and pessimistic views, suggesting the curve may be flattening.
- Stern, D. I. (2004). The rise and fall of the environmental Kuznets curve. World Development, 32(8), 1419–1439. A key critique of the econometric evidence.
- Stern, D. I. (2017). The environmental Kuznets curve after 25 years. Journal of Bioeconomics, 19(1), 7–28. A 25-year review concluding the curve is weak for carbon emissions.
- Kuznets, S. (1955). Economic growth and income inequality. American Economic Review, 45(1), 1–28. The original inequality inverted-U that gave the curve its name.