Environmental degradation (measured, for example) by CO2 emissions has an adverse effect on public health, leading to the need for a higher level of healthcare expenditure. The level of per capita income, which has been identified as a major determinant of healthcare expenditure, is associated with environmental degradation as represented by the environmental Kuznets curve. The results presented in this study show that when a country, like Australia, falls on the declining sector of the Environmental Kuznets Curve (EKC), healthcare expenditure is negatively related to environmental degradation. Although this proposition sounds counterintuitive, it is justified theoretically and supported empirically.
