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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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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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  1. Elhanan Helpman & Manuel Trajtenberg, 1994. "A Time to Sow and a Time to Reap: Growth Based on General Purpose Technologies," NBER Working Papers 4854, National Bureau of Economic Research, Inc.
  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. Nahuis, R., 2000. "Knowledge and Economic Growth," Open Access publications from Tilburg University urn:nbn:nl:ui:12-83771, Tilburg University.
  4. Timothy F. Bresnahan & Manuel Trajtenberg, 1992. "General Purpose Technologies "Engines of Growth?"," NBER Working Papers 4148, 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. Sjak Smulders, 1995. "Entropy, environment, and endogenous economic growth," International Tax and Public Finance, Springer, vol. 2(2), pages 319-340, August.
  8. 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.
  9. Gene M. Grossman & Alan B. Krueger, 1994. "Economic Growth and the Environment," NBER Working Papers 4634, National Bureau of Economic Research, Inc.
  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. 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.
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Cited by:
  1. Buehn, Andreas & Farzanegan, Mohammad Reza, 2013. "Hold your breath: A new index of air pollution," Energy Economics, Elsevier, vol. 37(C), pages 104-113.
  2. Grischa Perino, 2008. "The merits of new pollutants and how to get them when patents are granted," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(3), pages 313-327, July.
  3. 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).
  4. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve Hypothesis: A Survey," Ecological Economics, Elsevier, vol. 49(4), pages 431-455, August.
  5. Hannes Egli, 2005. "A New Approach to Pollution Modelling in Models of the Environmental Kuznets Curve," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 459-473, September.
  6. 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).
  7. Bretschger, Lucas, 2005. "Economics of technological change and the natural environment: How effective are innovations as a remedy for resource scarcity?," Ecological Economics, Elsevier, vol. 54(2-3), pages 148-163, August.
  8. Lundström, Susanna, 2003. "Technological Opportunities and Growth in the Natural Resource Sector," Working Papers in Economics 116, University of Gothenburg, Department of Economics.
  9. 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.
  10. Gerlagh , Reyer & Kverndokk, Snorre & Rosendahl, Knut Einar, 2008. "Linking Environmental and Innovation Policy," Memorandum 10/2008, Oslo University, Department of Economics.
  11. 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].
  12. 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).
  13. Dinda, Soumyananda, 2004. "Environmental Kuznets Curve: An Envelope of Technological Progress," MPRA Paper 28092, University Library of Munich, Germany, revised May 2010.
  14. 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.
  15. 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.

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