The Simple Analytics of the Environmental Kuznets Curve
NBER Working Paper No. 6739
Evidence suggests that some pollutants follow an inverse-U-shaped pattern relative to countries' incomes. This relationship has been called the out a simple and straight-forward static model of the microfoundations of the pollution-income relationship. We show that the environmental Kuznets curve can be derived directly from the technological link between consumption of a desired good and abatement of its undesirable byproduct. The inverse-U shape does not depend on the dynamics of growth, political institutions, or even externalities, and can be consistent with a decentralized economy as well as a Pareto efficient policy.
Published: Andreoni, James and Arik Levinson. "The Simple Analytics Of The Environmental Kuznets Curve," Journal of Public Economics, 2001, v80(2,May), 269-286.