The name is absent

2.2 Relationships between Environmental Qualityand Economic
Growth

The literature on the relationship between Per Capita Income
(PCI) or the PCNSDP in case of States within a country, and pollution or
environmental degradation generally attempts to verily the existence
of an inverted U-shaped curve in the PCI vs. pollution plane
('Environmental Kuznets Curve'). The relationship implies that with the
rise in PCI, environmental degradation continues up to a certain level
of PCI, but improves afterwards as with prosperity, countries shift to
cleaner production technologies or spend more resources on pollution
abatement (Esty and Porter, 2001-02; Andreoni and Levinson, 2001).
Recent empirical studies show that while some local pollutants like
Sulphur dioxide (SO₂), Suspended Particulate Matter (SPM), Carbon
monoxide (CO) etc. support EKC hypothesis; other pollutants exhibit
either monotonicity or N-Shaped curve (Dinda, 2004; Stern, 1998).
Studies based on both ambient concentration of pollutants (Baldwin,
1995; Grossman and Krueger, 1995; Selden and Song, 1994; Panayatou,
1993; Shafik and Bandyopadhyay, 1992; Pezzey, 1989) or the actual
emissions of pollutants (Bruvoll and Medin, 2003; de Bruyn et al., 1998;
Carson et al., 1997) also support the EKC hypothesis.

It is argued that working with a composite indicator of
pollutants, as a proxy of actual EQ scenario, scores over selection of a
single pollutant in determination of the EKC relationship (Mukherjee
and Kathuria, 2006), although only a handful Ofstudies have adopted
that approach so far. Jha and Bhanu Murthy (2001) created an
Environmental Degradation Index (EDI) for 174 countries and compared
that with the Human Development Index(HDI) instead of the PCI. The
Studyfound an inverse link between EDI and HDI, which supported the
existence of an inverted N-Shaped global EKC rather than an inverted
U-shaped one.

In Indian context, Mukherjee and Kathuria (2006) explored
the EKC relationship for 14 major Indian States over 1990-2001 by
considering 63 environmental variables, arranged under eight broad
environmental groups. The ranking of the States on a constructed
Environmental Quality Index (EQI) were determined by using the factor
analysis method. The results indicate that the relationship between EQ
and PCNSDP is slanting S-shaped, indicating that the economic growth
has occurred in Indian States mostly at the cost of EQ. It was observed
that except Bihar, all the States are on the upward sloping portion of
the EKC. Kadekodi and Venkatachalam (2005) noted evidence of a
strong linkage between various natural resources and environment with
income and the status of livelihood and concluded that the causal
relationship between poverty and environment works in both directions.¹¹
The research has also highlighted the importance of poverty alleviation
while minimising the human health and environmental Costsofeconomic
growth (Nadkarni, 2000) and the possibility Ofentering into a long-run
vicious circle of environmental degradation, greater inequality and lower
growth (Dutt and Rao, 1996) in that process.

¹¹ However the study noted a mixed effect of improvement in human development on
various individual pollution indicators in different states.

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