6. CONCLUSIONS AND POLICY IMPLICATIONS Since the early 1970s, especially after the United Nations Conference on the Human Environment in 1972, the relationship between production and environmental concerns has been handled by different methods in different disciplines. This is because the environment is of vital importance for human life, and they are confronted with serious environmental problems. The most important of these problems are as follows: The risk of going over the environmental pollution assimilation capacity; the difficulty in return of natural balance in the environment; large-scale health problems caused by environmental pollution; rapid depletion of natural resources; global warming and climate change, and the resulting related natural disasters such as floods; the reduction of biodiversity, air pollution, and soil pollution. Empirical studies on the environmental pollution–economic growth nexus explore the validity of the EKC hypothesis which states that environmental pollution will increase up to a certain threshold of income growth, and after this threshold, will begin to decrease due to the demand for a clean environment and structural and technological inputs. If the EKC hypothesis is valid, economic growth is both cause of and solution to environmental pollution. This approach is often used when arguing that countries should not compromise economic growth policies to reduce environmental effects. The EKC hypothesis is not valid in cases where economic growth that increased production is the only cause of environmental pollution. This has accelerated the search to replace the neoclassical growth strategy. Especially highlighted by the 1992 UNCED conference in Rio de Janeiro, a win-win approach to understanding the appropriate account of the ecological paradigm has gained importance in recent years. Therefore, the validity of the EKC hypothesis is an important issue in formulating economic growth policies for all countries. In this study, the following two samples are used: (i) 40 high income countries (OECD members and non-members) and (ii) 33 upper middle-income countries. These countries are selected according to data available from related income groups. The results from the dynamic panel data methods are as follows: (i) The Durbin–Hausman cointegration test shows that there is a long-term relationship between variables. (ii) The results from the CCE estimator indicate that there is evidence of validity of the EKC hypothesis in developed countries. (iii) The EKC hypothesis is not valid in the developing countries. These results show that economic growth is sufficient enough to safeguard environmental quality for developed countries. However, developing countries have not yet reached income levels high enough to be able to derive their turning points. Therefore, to reduce environmental pollution that comes with economic growth, developing countries should give importance to R&D activities and institutionalization of environmental awareness. An increase in environmental awareness is imperative and developing and developed countries must not forget the fact that the natural world of tomorrow will be created today. Also, our findings show that trade liberalization is not harmful for the environment in developed and developing countries. This means that the increase of trade volume will not produce more carbon emissions. Despite the results obtained for the developed countries, we cannot assume that environmental betterment will continue to accompany further growth of per capita income in developed countries. So that, future studies can examine the relationship between economic growth and other pollutants. Because, along with the economic growth it may increase the amount of other pollutants.
the relationship between production and environmental concerns has been handled by different methods in different disciplines Empirical studies on the environmental pollution economic growth nexus explore the validity of the EKC hypothesis If the EKC hypothesis is valid, economic growth is both cause of and solution to environmental pollution. In this study, the following two samples are used 40 high income countries and 33 upper middle-income countries These countries are selected according to data available from related income groups The results from the CCE estimator indicate that there is evidence of validity of the EKC hypothesis in developed countries The EKC hypothesis is not valid in the developing countries. These results show that economic growth is sufficient enough to safeguard environmental quality for developed countries. However, developing countries have not yet reached income levels high enough to be able to derive their turning points Therefore, to reduce environmental pollution that comes with economic growth, developing countries should give importance to R&D activities and institutionalization of environmental awareness. An increase in environmental awareness is imperative and developing and developed countries must not forget the fact that the natural world of tomorrow will be created today. our findings show that trade liberalization is not harmful for the environment in developed and developing countries This means that the increase of trade volume will not produce more carbon emissions