Economic structure, development policy and environmental quality: An empirical analysis of environmental Kuznets curves with Chinese municipal data

In many cases, the relationship between environmental pollution and economic development can be depicted by an inverted U-shaped curve, or an environmental Kuznets curve, where pollution initially increases with income and then decreases after a certain level of income has been reached. However, what determines the shape of an environmental Kuznets curve, such as the height and the turning point of the curve, has not been thoroughly studied. A good understanding of the determinants is vital to those interested indevelopment, especially in the developing world, where income growth is a high priority, yet environmental pollution also needs to be carefully controlled. This study analyzes the impact of economic structure, development strategy and environmental regulation on the shape of the environmental Kuznets curve by an analysis of a panel dataset at the city level obtained from China. The results show that economic structure, development strategy and environmental regulation can all have important implications for the relationship between environmental quality and economic development but that the impact can vary at different development stages.

► We present the height and slope adjustment mechanism for Environmental Kuznets Curve. ► The mechanisem is used to built direct link between characteristics of an economy and its EKC shape. ► Chinese municipal data are used to estimate such direct impacts. ► At different stages, the implications of an economy's characteristics on EKC are different.