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A further inquiry into the Pollution Haven Hypothesis and the Environmental Kuznets Curve

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  • Kearsley, Aaron
  • Riddel, Mary

Abstract

Empirical research on the relationship between economic growth and its impact on the environment often tests the Environmental Kuznets Curve (EKC), a hypothesis that rising national output leads to increases in pollution emissions until an economy reaches a certain size, and decreases thereafter. This paper addresses a branch of EKC literature focused on the role international trade plays in shaping this relationship. In particular, we test the Pollution Haven Hypothesis, which posits that emission reductions observed in developed nations are partly the result of shifting "dirty" production to developing nations with lax environmental standards. We estimate EKCs for seven oft-studied pollutants and find little evidence that pollution havens play a significant role in shaping the EKC. We also find that confidence intervals around EKC turning points are very wide, often including values well above the range of the data. This leads us to be skeptical of the optimistic view that economic growth naturally leads to improvements in environmental quality.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 69 (2010)
Issue (Month): 4 (February)
Pages: 905-919

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Handle: RePEc:eee:ecolec:v:69:y:2010:i:4:p:905-919

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Web page: http://www.elsevier.com/locate/ecolecon

Related research

Keywords: Environmental Kuznets Curve Pollution Haven Hypothesis;

References

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  1. Holtz-Eakin, Douglas & Selden, Thomas M., 1995. "Stoking the fires? CO2 emissions and economic growth," Journal of Public Economics, Elsevier, vol. 57(1), pages 85-101, May.
  2. Martin Jänicke & Manfred Binder & Harald Mönch, 1997. "‘Dirty industries’: Patterns of change in industrial countries," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 9(4), pages 467-491, June.
  3. James Andreoni & Arik Levinson, 1998. "The Simple Analytics of the Environmental Kuznets Curve," NBER Working Papers 6739, National Bureau of Economic Research, Inc.
  4. Florenz Plassmann & Neha Khanna, 2007. "Assessing the Precision of Turning Point Estimates in Polynomial Regression Functions," Econometric Reviews, Taylor & Francis Journals, vol. 26(5), pages 503-528.
  5. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May.
  6. World Bank, 2008. "World Development Indicators 2008," World Bank Publications, The World Bank, number 11855, October.
  7. Susmita Dasgupta & Benoit Laplante & Hua Wang & David Wheeler, 2002. "Confronting the Environmental Kuznets Curve," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 147-168, Winter.
  8. Cole, Matthew A., 2004. "Trade, the pollution haven hypothesis and the environmental Kuznets curve: examining the linkages," Ecological Economics, Elsevier, vol. 48(1), pages 71-81, January.
  9. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
  10. Adam B. Jaffe et al., 1995. "Environmental Regulation and the Competitiveness of U.S. Manufacturing: What Does the Evidence Tell Us?," Journal of Economic Literature, American Economic Association, vol. 33(1), pages 132-163, March.
  11. Werner Antweiler & Brian R. Copeland & M. Scott Taylor, 2001. "Is Free Trade Good for the Environment?," American Economic Review, American Economic Association, vol. 91(4), pages 877-908, September.
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Citations

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Cited by:
  1. Ariane Manuela AMIN & Johanna Choumert, 2013. "Development and biodiversity conservation in Sub-Saharan Africa: A spatial analysis," Working Papers halshs-00799175, HAL.
  2. Iwata, Hiroki & Okada, Keisuke & Samreth, Sovannroeun, 2010. "Empirical Study on the Determinants of CO2 Emissions: Evidence from OECD Countries," MPRA Paper 21520, University Library of Munich, Germany.
  3. Kaika, Dimitra & Zervas, Efthimios, 2013. "The Environmental Kuznets Curve (EKC) theory—Part A: Concept, causes and the CO2 emissions case," Energy Policy, Elsevier, vol. 62(C), pages 1392-1402.
  4. Ren, Shenggang & Yuan, Baolong & Ma, Xie & Chen, Xiaohong, 2014. "International trade, FDI (foreign direct investment) and embodied CO2 emissions: A case study of Chinas industrial sectors," China Economic Review, Elsevier, vol. 28(C), pages 123-134.
  5. Jorgenson, Andrew & Birkholz, Ryan, 2010. "Assessing the causes of anthropogenic methane emissions in comparative perspective, 1990-2005," Ecological Economics, Elsevier, vol. 69(12), pages 2634-2643, October.
  6. Virginia CIOBOTARU & Oana Catalina TAPURICA, 2011. "ANALYZING THE CONNEXIONS BETWEEN ECONOMIC DEVELOPMENT AND ENVIRONMENTAL COMPLIANCe: AN INTEGRATED APPROACH," Management Research and Practice, Research Centre in Public Administration and Public Services, Bucharest, Romania, vol. 3(4), pages 15-22, December.
  7. Shafiei, Sahar & Salim, Ruhul A., 2014. "Non-renewable and renewable energy consumption and CO2 emissions in OECD countries: A comparative analysis," Energy Policy, Elsevier, vol. 66(C), pages 547-556.
  8. Chandran, V.G.R. & Tang, Chor Foon, 2013. "The impacts of transport energy consumption, foreign direct investment and income on CO2 emissions in ASEAN-5 economies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 445-453.
  9. Roberto Mosheim, 2013. "A shadow distance function decomposition of the environmental Kuznets curve: comparing the South China Sea and the Caribbean," Journal of Productivity Analysis, Springer, vol. 40(3), pages 457-472, December.

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