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Explaining Environmental Kuznets Curves: How Pollution Induces Policy and New Technologies

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  • Smulders, J.A.
  • Bretschger, L.

    (Tilburg University, Center for Economic Research)

Abstract

Production often causes pollution as a by-product.Once pollution problems become too severe, regulation is introduced by political authorities which forces the economy to make a transition to cleaner production processes.We model this transition as a change in "general purpose technology" (GPT) and investigate how it interferes with economic growth driven by quality-improvements.The model gives an explanation for the inverted U-shaped relationship found in empirical research for many pollutants, often referred to as the Environmental Kuznets Curve (EKC).We provide an analytical foundation for the claim that the rise and decline of pollution can be explained by policy-induced technology shifts. KKeywords: pollution; environmental policy; technological change; economic growth;

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Bibliographic Info

Paper provided by Tilburg University, Center for Economic Research in its series Discussion Paper with number 2000-95.

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Date of creation: 2000
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Handle: RePEc:dgr:kubcen:200095

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References

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  1. Helpman, Elhanan & Trajtenberg, Manuel, 1994. "A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies," CEPR Discussion Papers 1080, C.E.P.R. Discussion Papers.
  2. Shafik, Nemat, 1994. "Economic Development and Environmental Quality: An Econometric Analysis," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 757-73, Supplemen.
  3. Sjak Smulders, 1995. "Entropy, environment, and endogenous economic growth," International Tax and Public Finance, Springer, vol. 2(2), pages 319-340, August.
  4. Gene M. Grossman & Alan B. Krueger, 1994. "Economic Growth and the Environment," NBER Working Papers 4634, National Bureau of Economic Research, Inc.
  5. Copeland, Brian R & Taylor, M Scott, 1994. "North-South Trade and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 755-87, August.
  6. Andreoni, James & Levinson, Arik, 2001. "The simple analytics of the environmental Kuznets curve," Journal of Public Economics, Elsevier, vol. 80(2), pages 269-286, May.
  7. Trajtenberg, M. & Bresnahan, T.F., 1992. "General Purpose Technologies: "Engines of Growth"," Papers 16-92, Tel Aviv.
  8. De Bruyn, Sander M., 1997. "Explaining the environmental Kuznets curve: structural change and international agreements in reducing sulphur emissions," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 485-503, November.
  9. Nahuis, R., 2000. "Knowledge and Economic Growth," Open Access publications from Tilburg University urn:nbn:nl:ui:12-83771, Tilburg University.
  10. 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.
  11. Cropper, Maureen & Griffiths, Charles, 1994. "The Interaction of Population Growth and Environmental Quality," American Economic Review, American Economic Association, vol. 84(2), pages 250-54, May.
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Cited by:
  1. Théophile, AZOMAHOU & Raouf, BOUCEKKINE & Phu, NUYEN VAN, 2003. "Energy consumption, technological progress and economic policy," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2003025, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  2. Grischa Perino, 2006. "The Merits of New Pollutants and How to Get Them When Patents Are Granted," Working Papers 0426, University of Heidelberg, Department of Economics, revised Jul 2006.
  3. Lucas Bretschger, 2003. "Economics of technological change and the natural environment: how effective are innovations as a remedy for resource scarcity?," CER-ETH Economics working paper series 03/27, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich, revised Jun 2004.
  4. Hannes Egli, 2005. "A new approach to pollution modelling in models of the environmental Kuznets curve," CER-ETH Economics working paper series 05/39, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  5. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve: An Envelope of Technological Progress," MPRA Paper 28092, University Library of Munich, Germany, revised May 2010.
  6. Márcia J. Diniz & Marcelo B. Diniz, 2005. "Trajetórias Da Qualidade Ambiental E Do Desenvolvimento Econômico Sustentável," Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting] 134, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
  7. Buehn, Andreas & Farzanegan, Mohammad Reza, 2013. "Hold your breath: A new index of air pollution," Energy Economics, Elsevier, vol. 37(C), pages 104-113.
  8. Verbeke, Tom & De Clercq, Marc, 2006. "The income-environment relationship: Evidence from a binary response model," Ecological Economics, Elsevier, vol. 59(4), pages 419-428, October.
  9. Gerlagh , Reyer & Kverndokk, Snorre & Rosendahl, Knut Einar, 2008. "Linking Environmental and Innovation Policy," Memorandum 10/2008, Oslo University, Department of Economics.
  10. Naeem Akram, 2012. "Is climate change hindering economic growth of Asian economies?," Asia Pacific Trade and Investment Review, United Nations Economic and Social Commission for Asia and the Pacific (ESCAP), vol. 19(2), pages 1-18, December.
  11. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
  12. Egli, Hannes, 2001. "Are cross-country studies of the Environmental Kuznets Curve misleading? New evidence from time series data for Germany," Wirtschaftswissenschaftliche Diskussionspapiere 10/2001, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.
  13. Lundström, Susanna, 2003. "Technological Opportunities and Growth in the Natural Resource Sector," Working Papers in Economics 116, University of Gothenburg, Department of Economics.
  14. Mohammad Reza Farzanegan & Tim Mennel, 2012. "Fiscal decentralization and Pollution: Institutions Matter," MAGKS Papers on Economics 201222, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
  15. Mohammad Reza Farzanegan & Andreas Buehn, 2012. "Hold Your Breath: A New Index of Air Quality," MAGKS Papers on Economics 201226, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).

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