Environmental Pollution And Economic Growth

Using the methods of dynamic economics and econometrics, together with china's empirical data, we study the relationship between environment and economy from theoretical aspect and empirical aspect respectively.In the first place, we discuss the impact of environmental pollution on economic development; we argue that environmental pollution will not only reduce the golden-rule level of capital and convergence speed of economy system, but also drag on economic growth. According to our empirical study, from china's inform and opening, the drag comes from environmental pollution on china's economic growth equal nearly to 1/10～1/5 of 1%GDP growth.Meanwhile, we argue how economy affects environment quality. From theoretical aspect, we explain the theory of the Environmental Kuznets Curve (EKC), and get the result that the shape of EKC depending on the relation between intertemporal and intratemporal elasticity of substitution. An empirical study on china gives the evidence, and shows that china's EKC lies on the rise part of inverted-U shape EKC now.At the last part of our paper, we discuss the trade-off between environmental quality and economic growth, our result is that to build up a mechanism basing on market is the best way to protect environment and develop economy. We believe that low-carbon economy is the main direction of economic development in the future.