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The Environmental Kuznets Curve and Regional Convergence in Ukraine

Yuri V. Yevdokimov, Leonid G. Melnyk, Oleksandr V. Kubatko

Abstract


The relationship between economic development in Ukraine and environmental pollution is modeled with the help of the Environmental Kuznets Curve (EKC). The EKC suggests an inverted U–shape relationship between per capita income and pollution: Starting at low levels of income, initially pollution increases with an increase in per capita income but then, after income reaches the so-called turning point, pollution starts to decline. The main finding of this study is that Ukraine follows the EKC for sulfur dioxide, nitrogen dioxide and Index of Aggregate Pollution measured in terms of concentrations. On the other hand, there is a strictly increasing pattern for dust and carbon dioxide. For pollutants exhibiting the EKC relationship, turning points are estimated, and they appear to be in the range of $1,000–$3,000 in terms of 2007 dollars. These results are supported by the existence of economic convergence in Ukraine as a necessary condition for the EKC. Based on the obtained results, it is expected that in Ukraine pollution by sulfur dioxide and nitrogen dioxide is going to decrease in the next two years while pollution by dust and carbon dioxide is going to increase.

Keywords


Environmental Kuznets Curve, economic convergence, econometric estimation, panel data analysis, developing countries

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