Fix poverty and the environment will fix itself

I first read about Environmental Kuznets Curve (EKC) in Matt Ridley’s book the Rational Optimist. I was impressed.

The correlation between per capta income and quality of the environment was a definitive argument of the environmental footprint of poverty that I, being born in Rio, have always known of. Poor land use, lousy water and energy supply, bad sewage and garbage disposal… they all contribute to the environmental footprint. 

Instinctively, it makes sense: our basic needs are more important than our non basic needs. And the way our brain is structured, even if not procured in a sustainable way, we will prioratize the solve our basic needs.

I went to read the article by Yandle, Bhattarai, Vijayaraghavan. 2004. Environmental Kuznets Curves: A Review of Findings, Methods, and Policy Implications PERC Research Study

Since 1991, when economists first reported a systematic relationship between income changes and environmental quality, the Environmental Kuznets Curve (EKC) has become standard fare in technical conversations about environmental policy. EKCs are statistical artifacts that summarize a few important aspects of collective human behavior in two-dimensional space. A chart showing an Environmental Kuznets Curve reveals how a specific measurement of environmental quality changes as the income of a nation or other large human community changes. When first unveiled, EKCs revealed a surprising outcome. The early estimates showed that some important indicators of environmental quality such as the concentrations of sulfur dioxide and particulates in the air actually improved as incomes and levels of consumption went up. This happy outcome occurred when incomes were higher. Before that point, however, at lower income levels, environmental quality deteriorated as incomes began to rise.

The curve is named after Simon Kuznets, economist in the 50’s that suggested as per capita income increases, income inequality also increases at first but then, after some turning point, starts declining, represented by a bell- shaped. The empirical observation of the relationship between per capita income and income inequality led Simon Kuznets win the Nobel prize in economics in 1971.

The EKC statistical relationship suggests that as development and industrialization progress, environmental damage increases due to greater use of natural resources, more emission of pollutants, the operation of less efficient and relatively dirty technologies, the high priority given to increases in material output, and disregard for—or ignorance of—the environmental consequences of growth. However, as economic growth continues and life expectancies increase, cleaner water, improved air quality, and a generally cleaner habitat become more valuable as people make choices at the margin about how to spend their incomes. Much later, in the post-industrial stage, cleaner technologies and a shift to information and service-based activities combine with a growing ability and willingness to enhance environmental quality (Lindmark 2002; Munasinghe 1999).1

Grossman and Krueger (1991) found EKC patterns of relationship for the ambient levels of both sulfur dioxide and dark matter (smoke) suspended in the air. The turning point came when per capita GDP was in the range of $4,000 to $5,000 measured in 1985 U.S.

Authors found that EKC applies also to deforestation:

He found that the turning-point income for deforestation occurs much earlier (around $800 per capita or $1,300 in 2003 dollars) than for emissions ($3,000 or about $5,000 in 2003 dollars for sulfur dioxide, $4,500 or $7,600 in 2003 dollars for suspended particulates and $5,500 or $9,300 for oxides of nitrogen). According to Panayotou, this is because deforestation for either agricultural expansion or logging takes place at an earlier stage of development than heavy industrialization.

And to overall environmental degradation:

On the basis of his empirical work, Panayotou argued that environmental degradation overall (combined resource depletion and pollution) is worse at levels of income per capita under $1,000 (or about $1,600 in 2003 dollars). Between $1,000 and $3,000 (or about $5,000 in 2003 dollars), both the economy and environmental degradation undergo dramatic structural change from rural to urban and from the principal pursuit of agricultural production to industrial production. A second structural transformation begins to take place, he said, as countries surpass a per capita income of $10,000 (about $16,900 in 2003 dollars) and begin to shift from energy-intensive heavy industry into services and information-intensive industry.

The conclusion may be an ugly truth: environmental quality is a luxury good!

And the consequence of that conclusion is that the environment cannot be our priority right now. We actually may have to deal with higher levels of environmental degradation to achieve environmental quality. The storm before the calm.

Or not…. if we invest in technology to disrupt the way we fight poverty. Then, we can end poverty in an exponential way, achieving environmental quality much faster, as well as longevity and, why not, peace.

Poverty is a transversal problem and if we fix it, we will fix many other problems.

The question I’m asking myself now is: how could I, being an environmental scientist for 20 years, never heard of the environmental kuznets curves before?

It meant also that many of the environmental scientists that I’ve being in contact with, who participates in UN and IPCC meetings, who publish environmental and climate research in leading scientific journals, have never heard of it too. And that is a scary thought. Because it could mean that environmental scientists are barking at the wrong tree when they push for emission and pollution controls to achieve environmental quality.