A Study on the Relationship between Economic Growth and the Environment in OECD Countries

Authors : Demet Eroğlu Sevinç

Pages : 140-149

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Publication Date : 2024-06-30

Article Type : Research Paper

Abstract :The concept of environmentally sensitive growth, which constitutes a significant output of the process of economic growth and development, first emerged due to the environmental degradation caused by the notion of “growth at any cost.” Particularly, Kuznets’ study in the 1950s, investigating the environmental impacts of growth, has served as a reference for many studies in this field. In this context, the significant negative externalities posed by economic activities, often ruthlessly carried out by industrialized or industrializing countries, form the basic proposition of the environmental Kuznets hypothesis. This study also examines the validity of the Environmental Kuznets Hypothesis within the scope of OECD member countries. Using panel threshold model covering the period 1965-2020, the analysis demonstrates the validity of the Environmental Kuznets Hypothesis, indicating that economic growth significantly influences environmental degradation up to a certain identified income threshold level. However, beyond this threshold level, the impact of economic growth on environmental degradation gradually diminishes. In this regard, the study reveals the concordance of the relationship between economic growth and the environment with the hypothesis in a reverse-U shape.
Keywords : Ekonomik Büyüme, Çevresel Kuznets Hipotezi, Panel Eşik Model