Does Economic Growth Reduce Pollution? Empirical Evidence from Low Income Countries

Abstract

The issue of environmental degradation has long been associated as a residue of the economic development process, especially in low income countries. Development activities have to continue nevertheless, because people's welfare is the goal. This study aims to find the impact of economic growth, population and energy consumption to environmental pollution. Another purpose is to prove the Environmental Kuznets Curve (EKC) hypothesis. The methods utilized is panel data regression with fixed effect model using Drisscol-Kraay estimator. The result of the study indicates that increased per capita GDP and population leads to environmental pollution in low income countries, while energy consumption has no significant effect. The result also confirmed the EKC hypothesis in low income countries.