Environmental productivity and Kuznets curve in India

Abstract

As a result of India's extremely rapid economic growth, the scale and seriousness of environmental problems are no longer in doubt. Whether pollution abatement technologies are utilized more efficiently is crucial in the analysis of environmental management because it influences the cost of alternative production and pollution abatement technologies. In this study, we use state-level industry data of sulfur dioxide, nitrogen dioxide, and suspended particular matter over the period 1991–2003. Employing recently developed productivity measurement technique, we show that overall environmental productivities decrease over time in India. Furthermore, we analyze the determinants of environmental productivities and find environmental Kuznets curve type relationship existences between environmental productivity and income. Panel analysis results show that the scale effect dominates over the technique effect. Therefore, a combined effect of income on environmental productivity is negative.