The Demographic Transition and the Ecological Transition: Enriching the Environmental Kuznets Curve Hypothesis

The impact of population growth on the environment is an issue that is highly debated yet comparatively under-researched empirically. This is true despite a vast number of published articles on the link between population and environmental changes speculating on the sign of the environmentpopulation elasticity. Although the issue can ultimately only be settled at the empirical level, the above contributions have been largely speculative. It was only in the mid-1990s that population was accounted for in the empirical work on the relationship between environmental quality/degradation and income within the framework of the Environmental Kuznets Curve (EKC) hypothesis. While empirical EKC investigations have provided a useful contribution to the issue, a further important step can be made. Population in the EKC hypothesis is not treated like income but it serves, so to speak, just as a normalizing variable. As it turns out, however, also for population can we formulate a hypothetical behavior of its evolution over time vis-à-vis income, that can be accommodated within an EKC framework. This is the Demographic Transition. With the exception of Baldwin (1995) none of the studies mentioned so far have investigated the nexus between pollution, environmental degradation, and income within the conceptual framework of the two transitions: the demographic and the ecological one. The present paper represents the first econometric analysis of Demographic and Ecological Transitions. We incorporate the former into the EKC framework, thus obtaining an enriched EKC hypothesis. Very long time series for 17 OECD countries in the case of CO2 emissions support our empirical approach.