Development Specificity of Russian Regions and the Environmental Kuznets Curve

Abstract

Economic development due to the increased production and consumption growth has a negative impact on the environment. It is possible to estimate and analyze the environmental changes by creating economic models that reveal the effect of different factors on the balance of natural environment. The approach proposed in the current article is based on calculating the functions of pollution, which allows analyzing different ways of investment distribution, estimating the impact of the economy structure change, and considering the dynamics of investments and costs of environmental protection. The article also examines the correlation between environmental and economic indicators of the development of different regions in Russia, builds models describing the correlation, defines the groups of regions with similar environmental and economic characteristics and proposes calculations. The authors demonstrate that the development of 3 groups of regions is described by the environmental Kuznets curve with different parameters, and specify the values of the gross regional product per capita when the emissions may start decreasing. For each of the four determined groups of regions of Russia the factors influencing the emission of pollutants in the atmosphere are revealed. Russian regions vary significantly depending on their level of social and economic development, and hence it is important to estimate how the differences influence on the type and on the parameters of the applied models, and therefore on the environmental and economic processes. The study makes it possible to conclude that improvement in the environmental situation is connected with investments into economy modernization, in developing new sectors of economy and in protecting the atmosphere. The obtained results will facilitate getting more precise forecasts of environmental and economic processes and regional development strategies.