Water Pollution and Economic Growth

Abstract: Water pollution is a cornerstone of environmental issues, where it not only harms human health but also has major economic consequences. This study examines whether there is proof of the inverted U – shape Environmental Kuznets Curve (EKC) between water pollution and GDP per capita for 16 European countries between the years 1992 and 2018. The study is divided into two parts, one part where the focus is on whether there is an EKC for all 16 countries together and the other part examines in which of these 16 countries it is possible to find the EKC. This study uses a dynamic econometric technique, the generalized method of moments (GMM) but also a fixed effects regression model (FEM). Furthermore, an OLS time series analysis has been used to examine the relationship for each country. This study could not find empirical support for the EKC hypothesis between BOD and GDP per capita on European data, but that there is evidence that it exists an inverted U – shape EKC for Albania and North Macedonia.