Growth and environmental quality: Testing the double convergence hypothesis

This paper discusses the double convergence hypothesis (DCH) that the uncritical analysis of the so-called environmental Kuznets curve (EKC) implicitly implies. According to the EKC, empirical evidence would support the hypothesis that economic growth, through a deterministic sequence of phases, would produce cross-country convergence in per capita output and, as a by-product, convergence in (the demand for) environmental quality. However, factual analysis seems to reject the general hypothesis of convergence in per capita output, limiting the validity of such an assessment to the case of homogeneous groups of countries. This is why, to test the DCH, the paper focuses on the original group of OECD countries for which the economic convergence turned out to be true. This allows us to verify whether "green" [beta] and [sigma] convergence follows as a consequence of economic convergence. The paper also tests for a more equitable distribution of protection policies among countries. Unlike other studies, which do not make the DCH explicit and have focused on pollutant emissions, this research explicitly tests for the double convergence using, as a proxy for the demand for environmental quality, the territory set aside for protected areas. The results confirm that, for the selected homogenous group of countries, growth has accompanied the demand for environmental quality. This happens both in terms of conditional and stochastic convergence.