Environmental Kuznets curve and domestic material consumption indicator: an European analysis

Abstract

In our paper, we investigate the relation between per capita Domestic Material Consumption indicator (DMC) assumed as a potential environmental degradation indicator and per capita income. DMC is a physical measure developed by official statistics in recent years and derived from a Satellite Accounts System to evaluate the material dimension of human development and the environmental consequences of economic growth. While the literature has focused its attention on pollution and its measures, we consider as environmental degradation the impact of production and consumption on natural resources extracted from the global environment for the functioning of social-economic systems. In particular, we want to estimate if there exists a relationship similar to the Environmental Kuznets Curve (EKC) between per capita DMC Indicator and per capita GDP controlling for final Consumption expenditure, Openness index trade and national Research and Development expenditure by using a cross–European panel of countries over the period 2000-2010. Our results support the EKC hypothesis. However, the value of income at the turning point is high and probably there is a delink between DMC indicator and GDP as in the case of CO2 emissions and income literature