Institute For The Future

"Kuznets Curves, CO2, and Deforestation"

In environmental economics circles, one of the more famous graphs (and concepts) is the Economics Kuznets Curve. It's an inverse U-shape, and it argues this: economic growth generates lots of pollution in the early stages of national development (e.g., the transition from agricultural to industrial economies), but at a certain point begins to trend downward, as people become more concerned about quality of life, and as economies devote themselves more to tertiary activities, services, etc.

A. Kahuthu's "Economic Growth and Environmental Degradation in a Global Context" (Environment, Development and Sustainability (2006)) looks at data on CO2 emissions and deforestation, from the 1960s to the present. What the article finds is that there is a point-- about where average annual incomes reach $10,000-- where CO2 emissions start to fall relative to economic growth; but there is no evidence for such a relationship with deforestation. Integration into the global economy provides a small increase in bad behavior (i.e., it encourages more pollution), but only a small one.