Does economic growth drive environmental innovation? This paper extends previous studies of the environmental Kuznets curve by examining the role of rising incomes in promoting the development of new technologies directed toward environmental improvements. The study focuses on understanding how increased income influences the development of technologies for **environmental protection**. Based on an analysis of data from 19 OECD countries (1980–94), the income elasticity of public research and development funding for environmental protection is positive and may be close to unity. However, this should be interpreted cautiously in light of: (1) the small size of public research and development funding relative to overall spending on environmental protection, (2) the ability of a country to substitute between public and private research and development expenditures, as well as among alternative policy instruments, and (3) the possibility that public research and development funding may be a form of industrial subsidy in some countries. These findings suggest that emissions of at least some pollutants may decline with income after a threshold level is reached. Public funding may be a form of industrial subsidy in some countries. This research adds valuable insights to the debate on economic growth and **environmental sustainability**, highlighting the potential for income-driven technological advancements to mitigate environmental damage.
Published in Environment and Development Economics, this research fits the journal's focus on the economic dimensions of environmental issues in developing countries. By examining the relationship between income and environmental R&D, the paper contributes to the understanding of sustainable development.
| Category | Category Repetition |
|---|---|
| Geography. Anthropology. Recreation: Environmental sciences | 1 |
| Technology: Environmental technology. Sanitary engineering | 1 |
| Science: Biology (General): Ecology | 1 |