China: the environmental Kuznets curve and policy effects

Developing countries are under increasing pressure to deal with a variety of environmental problems. These include industrial pollution, urban environmental issues, the deterioration of ecosystems, and global warming. At the same time, the countries are expected to achieve high economic growth. Therefore, developing countries urgently need to put maximum effort into their policies for improving environmental management and technology in order to overcome environmental difficulties. This study focuses on the case of China, a typical example of a county facing environmental difficulties under high economic growth. It examines the income-environment relationship and environmental policy effects. Specifically, the two main questions are these: whether the environmental Kuznets curve (EK curve: in the course of economic development, the environment first gets worse, and then begins to get better) has been validated in China –in such typical fields as air and water pollution, and to what extent China’s environmental policies on pollution control have contributed to environmental improvements. The study’s main findings are as follows: (1) a meaningful EK curve was verified for sulfur dioxide emission; and (2) environmental policy effects were identified in the sense that public resources, such as facilities for environmental treatment and manpower for environmental agencies, have an impact in reducing the relative level of sulfur emission against real income.