For economic growth and environmental pollution, we often only pay attention to the one-way effect of the economy on pollution but ignore the reverse effect of pollution on growth, which makes the form of Environmental Kuznets Curve diverse. In order to comprehensively investigate the two-way impact and dynamic relationship between them, based on the panel data of provinces and cities in China from 2000 to 2019, this paper first uses the three-stage least squares (3LSL) estimation simultaneous equations model to investigate the shape of China's Environmental Kuznets environmental curve, and the influence of pollution emission control variables on pollution emission and the output effect of three environmental pollution indicators are analyzed, then uses the state-space model to analyze further the dynamic correlation between economic growth and environmental pollution. Industrial pollution emission is closely related to industrial development, which plays a crucial role in China’s macroeconomic development. Therefore, this paper selects three indicators: industrial wastewater discharge, industrial sulfur dioxide discharge, and industrial solid waste to reflect the degree of environmental pollution. The empirical results show that the relationship between industrial wastewater discharge, industrial sulfur dioxide discharge, industrial solid waste production, and per capita GDP conforms to the Environmental Kuznets inverted U-curve. With economic growth and income level improvement, the environmental quality tends to deteriorate in the initial development stage. When the economy develops to a certain level, the state of environmental deterioration peaks, and then the environmental quality tends to improve. The direction and degree of the impact of various pollutants on economic growth are different. the two-way dynamic impact relationship between economic growth and environmental pollution is studied based on the state-space model. The empirical results show that there is a dynamic correlation between economic growth and environmental pollution. Especially after 2012, the elasticity of pollution to economic growth tends to be stable, while the elasticity of economic growth to pollution is increasing, indicating that China's pollutant control has achieved good results in recent years. The coordination between environmental protection and economic growth has been enhanced.
