Environmental Sustainability and Economy: Chapter 3 - Interconnecting the environment with economic development of a nation

In the past few decades, economic growth has created dramatic pressure on the environment in the form of increased CO2 emissions, exhaustion of natural resources, and climate change. Exploring the relationship between environmental quality and economic development would be helpful for policymakers to design and implement effective policies in order to achieve sustainability goals. The interdependency of economic growth on the environment and vice-versa is best explained by the Environment Kuznets Curve (EKC), which shows that environmental degradation increases in the initial phases of growth, but it subsequently decreases as income transcends a threshold value taking the form of an inverted U. This chapter aims to explain the role of natural resources in supporting economic growth and provides a literature survey of various studies on the EKC hypothesis. Based on the evidence, this study indicates that increased income has positive influence on pollution measures, but on the contrary, it also has an adverse effect on most ecoefficient policies of environmental sustainability. Since economic progression leads to environmental improvement, economic growth can be considered as one of the solutions for ecological problems.