Environment, governance and GDP: Discovering their connections

Literature on environmental studies has long focused on the influence of GDP on the environment. A popular assumption is that environmental degradation is unavoidable at the early stage of development. As per capita GDP gets to a certain point, environmental quality starts to improve. This pattern is referred to as the Environmental Kuznets Curve (EKC). The implied logic behind the EKC is that environmental quality is unilaterally determined by GDP. Beginning with a thorough examination of the EKC pattern, this dissertation questions the logic and argues that environmental issues should not be viewed unilaterally through the lens of either GDP or governance alone. Findings from a series of reduced-form models suggest that both GDP and governance have mixed and conditional impact on environmental quality. The case study from the Caohai Nature Reserve in China illustrates how environment, governance and GDP interact with each other in real life. The research contributes to environmental studies in three ways: (1) it puts sustainability, GDP and governance in a same analytical framework, while current literature often focuses on any two of these three concepts (2) this study is the most comprehensive in terms of the coverage of countries and the breadth of environmental quality, as measured by air quality, water quality, wilderness of territorial system and biodiversity (3) it looks into the interrelationships among the three concepts across different stage of development instead of viewing them as a uniform process.