Anxiety and technological change -- Explaining the inverted U-curve of sulphur dioxide emissions in late 20th century Finland

Abstract

This article examines the linkage between per capita GDP and sulphur dioxide emissions for one single country, in this case Finland. The narrow approach together with a combination of a historical and economical approach enables us to cut deeper into the controversial environmental Kuznets curve-hypothesis. We found the main reasons for a downturn in sulphur emissions to be: technological development and anxiety about possible environmental damage and economic costs related to that. It can be discussed whether our results refute the environmental Kuznets curve or just show possible ways in which the environmental Kuznets curve is achieved. Nevertheless our case study casts some serious doubt on the most straightforward assumption coming out from the EKC, that economic growth would automatically solve environmental problems. We claim that the causal connection might also go in an opposite direction: proper environmental standards and conservation comprise a necessary condition for economic growth in the long run.