The Environmental Kuznets Curve (EKC) shows the relationship between per capita GDP and environmental loss.

What is the shape of Environmental Kuznets Curve ?

Question

The Environmental Kuznets Curve (EKC) shows the relationship between per capita GDP and environmental loss. What is the shape of Environmental Kuznets Curve ?

UnlockIAS · Accepted Answer

Correct — A, inverted 'U' shaped. The Environmental Kuznets Curve is the hypothesis that as per capita income rises, environmental degradation first increases, reaches a peak at some turning-point level of income, and then declines — tracing a smooth inverted U when degradation is plotted on the vertical axis against per capita GDP on the horizontal axis. The reasoning behind the two arms is that early industrialisation is dirty and resource-hungry, while richer societies shift towards services, adopt cleaner technology, and demand and can afford stricter environmental regulation. The name is borrowed from Simon Kuznets, who in 1955 proposed a similar inverted-U path for income inequality as an economy develops; the environmental version was popularised by empirical work in the early 1990s, and the label itself is generally credited to Thomas Panayotou (1993).

Why the other options are wrong — (b) An inverted V implies a sharp kink — degradation rising in a straight line, turning abruptly at a single point, and falling in a straight line. The EKC is described and estimated as a smooth curve with a gradual turning point, not a peak with a corner.  (c) An inverted L would mean degradation is high from the very start and then simply drops away — it has no rising arm. The whole point of the EKC is that degradation first worsens as a poor economy industrialises, and only later improves.  (d) Not applicable, since the inverted-U description in option (a) is the standard textbook statement of the Environmental Kuznets Curve.

Concept: The Environmental Kuznets Curve is a claim about the path, not a law of nature: it says the relationship between per capita income and environmental damage is non-monotonic. Economists usually decompose it into three effects — a scale effect (more output means more pollution), a composition effect (the economy shifts from agriculture to industry and then to less polluting services), and a technique effect (richer countries use cleaner methods and enforce tougher standards). While the scale effect dominates, the curve rises; once composition and technique effects outweigh it, the curve turns down. That turning point is estimated from data and differs sharply from one pollutant and one country to another.

State PCS 2019 Q35 — Economy PYQ with Answer

State PCS 2019 Q35 — Economy PYQ with Answer