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Applicability of the environmental Kuznets curve to construction waste management: A panel analysis of 27 European economies

https://doi.org/10.1016/j.resconrec.2022.106667Get rights and content

Highlights

  • The first attempt of validating the EKC in construction waste management is made.

  • The EKC is found valid in the domain of construction waste management.

  • A panel analysis of 27 European economies is adopted for validating the EKC.

  • The EKC provides great referential value for both policymakers and researchers.

Abstract

The environmental Kuznets curve has received widespread attention from researchers and policymakers for its ability to vividly capture the dynamics between economy and environment. While attempts have been made to validate the environmental Kuznets curve and harness its explanatory power in different dilemmatic scenarios (e.g., economic development and greenhouse gas induced climate change), these scenarios do not include construction waste management. Given its impact on economic development and environmental protection, this research investigates whether the environmental Kuznets curve is applicable to construction waste management. We adopt gross domestic product per capita and construction waste generation as economic and environmental indicators, respectively. Considering the stationary and long-term equilibrium effects, a panel dataset derived from 27 European economies is adopted to estimate the inverted-U relationship between gross domestic product per capita and construction waste generation. In the sample economy group, we confirm applicability of the environmental Kuznets curve to construction waste management. This study, therefore, makes a simple but non-trivial theoretical contribution by extending the environmental Kuznets curve to the construction waste management domain. Future studies are recommended to further validate the environmental Kuznets curve using a wider set of economies and longer panel data, and more importantly, to harness its power by implementing it in real-life construction waste management scenarios.

Introduction

The environmental Kuznets curve (EKC) hypothesizes an inverted-U shaped relationship between economic development and environmental degradation. It posits that during the early stage of economic development, environmental quality deteriorates rapidly but beyond a certain development level, the pace of environmental degradation slows down and environmental quality starts to improve (Sarkodie & Ozturk, 2020). The EKC thus indicates a dynamic evolvement between economy and environment, implying a general strategic pathway to achieve a virtuous circle between the two. As Stern (2004) puts it, if the EKC proves true in general, then economic growth can be seen compatible with environmental quality rather than leading inevitably to environmental degradation. Based on the EKC, policymakers can formulate targeted strategies to achieve a trade-off between economic development and environmental protection goals. By figuring out the rationales behind the EKC, policymakers can know what targeted strategies they are supposed to deploy, such as crafting environmental regulations, developing cutting-edge technologies and improving the public's awareness on environmental protection. Therefore, the EKC is the grounded theoretical foundation that policymakers may reply on to formulate their development strategies.

Due to its policymaking significance, numerous studies have been conducted to validate the EKC applicability to various economic and environmental dilemmas. Prominent among these dilemmas is economic development and carbon emission-induced climate change. Researchers have identified the EKC between gross domestic product (GDP) and pollution indicators such as CO2 (Joshi & Beck, 2018), SO2 (Ridzuan, 2019), N2O (Hove & Tursoy, 2019), and suspended particulate matter emissions (Stern & Zha, 2016). The EKC is a powerful tool that can reveal pathways to carbon neutrality (Shen et al., 2021) and control global warming at 1.5°C above pre-industrial levels (IPCC, 2018). It has also been extended to other environmental issues, such as industrial sewage (Wang et al., 2016), deforestation rate (Culas, 2012), ecological footprint (Ulucak and Bilgili, 2018) and municipal solid waste (Lee et al., 2016; Gui et al., 2019). However, to the best of our knowledge, no research to date has been conducted to explore whether the EKC is applicable to construction waste management (CWM).

Construction epitomizes the dilemma of economic development and environmental protection. While it materializes the built environment in support of socioeconomic, and cultural activities (Yang et al., 2021; Zhao et al., 2020) and addresses contemporary challenges such as housing shortages and extreme poverty, construction also produces voluminous solid waste. Construction, or alternatively called construction and demolition (C&D) waste, is a special category of solid waste generated from various construction activities, including new construction, refurbishment, renovation, retrofitting, demolition, and infrastructure works (HKEPD, 2005; Wu et al., 2022; Chen et al., 2022). It comprises inert materials such as concrete, bricks, debris, rubble and slurry, and non-inert waste like metal, bamboo, packaging, paper, wood and vegetation. Construction waste is one of the largest solid waste streams in the world, contributing 30–40% of total solid waste landfilled in many economies (Islam et al., 2019). However, landfilling not only threatens the natural environment and public health, but also rapidly depletes non-renewable finite land resources (Molla et al., 2021).

If the EKC proves true in the dynamics of economic growth and CWM, policymakers will be better positioned to formulate strategies for achieving a win-win between the two. According to Porter's theories of strategic management (Porter, 1996) and industrial economics (Porter, 1997), knowing one's own position in the industrial spectrum is critical for formulating effective competitive strategies. Likewise, according to Lu and Tam (2013), any CWM strategy must give full concerns to its bound stage of economic development. Following the EKC, policymakers can obtain insights into future economic growth and CWM scenarios and work towards a desirable one. In other words, by figuring out whether the EKC is applicable to CWM, policymakers can be able to formulate evidence-based strategies for better coping with their dilemma between economic development and CWM. This study, therefore, aims to investigate whether the EKC is applicable to CWM.

This paper is structured as follows. Sections 2 and 3 review the literature on the EKC and CWM, respectively. Section 4 outlines the research methodology adopted in the study. Section 5 presents the data analyses and results. Section 6 discusses the implications of the CWM EKC, the strengths and weaknesses of this research, and future research directions, while conclusions are drawn in Section 7. The contribution of the study can be perceived from both theoretical and practical lens. Theoretically, it is one of the first attempts to validate the EKC in the CWM domain. Practically, this study provides useful references for policymakers to formulate targeted strategies for achieving a balance between economic development and CWM by building up their EKC and positioning them in the curve.

Section snippets

The environmental Kuznets curve

The EKC hypothesizes an inverted-U shaped relationship between economic development and environmental degradation. It was named after Kuznets for his proposed relationship between economic growth and income inequality. The inverted-U relationship between economy and environment was first indicated by Grossman and Krueger (1991) in their working paper testing implications of the North American Free Trade Agreement on economic growth and environmental degradation. As shown in Fig. 1, the EKC

Construction waste management

Construction waste is a special type of solid waste arising from a variety of construction activities, such as new construction, renovation, and demolition (Wu et al., 2019; Lu et al., 2021; Lu and Chen, 2022). It often has clear definitions, e.g., in the United States (USEPA, 2018), the European Union (EU) (2000) (e.g., the European Waste Catalogue), the United Kingdom (DEFRA, 2021), Australia (DEWHA, 2010), and Hong Kong (HKEPD, 1998). Due to large-scale urbanization and urban regeneration,

The quadratic regression model of the EKC

Learning from previous studies, this research will use GDP/capita as an indicator for economic development and construction waste generation (CWG) as a proxy for environmental degradation. As most EKC studies have found an inverted-U shape between economic development and environmental degradation, it is legitimate to infer the same between GDP/capita and CWG. A quadratic regression model in its general form as seen in most EKC studies (Shen et al., 2018; Shuai et al., 2017; Culas, 2012), can

Results and analyses

By feeding the data into statistical analysis, the results of the unit root test, cointegration test and cointegration estimation are presented separately as follows.

The usefulness of the CWM EKC

This study pioneers to investigate the applicability of the EKC to the dilemma of economic growth and environmental protection with a focus on CWM. The research makes several theoretical and practical contributions. In the theoretical sphere, it confirms the applicability of the EKC in CWM. It extends the EKC, proven in other cases of economic activity-induced pollutions such as greenhouse gas emissions, to CWG. It opens up an avenue for researchers and practitioners to consciously examine the

Conclusion

The environmental Kuznets curve (EKC) is an intuitive yet powerful instrument to explain the dilemmatic interplays between economic development and environmental protection. It has been validated across different economies, industrial sectors, and using different environmental indicators such as CO2, SO2, N2O, suspended particles, industrial sewage, and municipal solid waste, but not in the construction waste management (CWM) domain despite that construction waste comprises up to 30∼40% of all

CRediT authorship contribution statement

Zhikang Bao: Conceptualization, Data curation, Formal analysis, Investigation, Methodology, Project administration, Writing – original draft. Weisheng Lu: Funding acquisition, Resources, Supervision, Validation, Visualization, Writing – review & editing.

Declaration of Competing Interest

The authors declare that they have no known competing financial interests or personal relationships that could have appeared to influence the work reported in this paper.

Acknowledgment

This research is supported by Strategic Public Policy Research (SPPR) (Project Number: S2018.A8.010)) Funding Schemes from the Policy Innovation and Co-ordination Office of Hong Kong Government SAR.

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