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Transboundary Externalities in the Environmental Transition Hypothesis

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  • Ansuategui Cobo, José Alberto
  • Perrings, Charles

Abstract

The Environmental Kuznets Curve (EKC) is a hypothesis which implies that it is possible to "grow out of environmental degradation." Most theoretical models of the EKC relation have not accounted for transboundary and intergenerational externalities, nor have empirical studies provided evidence that validates an inverted U shaped relation between environmental degradation and economic growth for pollution problems where the effects are far-displaced or long-delayed. This paper integrates the theory of transboundary externalities into the most common theoretical framework applied to the EKC hypothesis. It shows that where a significant proportion of environmental impacts of economic activity occurs outside the territories in which those activities take place, the de-linking of growth and environmental degradation is less likely to happen. This proposition is demonstrated by assuming that decisionmakers have a Nash-type non-cooperative strategic behavior.

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Paper provided by Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística) in its series BILTOKI with number 1999-05.

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Date of creation: Jan 1999
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Handle: RePEc:ehu:biltok:199905

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Keywords: environmental transition; growth; Kuznets; pollution; transboundary externalities;

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Cited by:
  1. Ansuategui Cobo, José Alberto & Perrings, Charles, 1999. "Transboundary Externalities in the Environmental Transition Hypothesis," BILTOKI 1999-05, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
  2. Halkos, George & Tzeremes, Nickolaos, 2011. "Regional environmental efficiency and economic growth: NUTS2 evidence from Germany, France and the UK," MPRA Paper 33698, University Library of Munich, Germany.
  3. Ansuategi, Alberto & Escapa, Marta, 2002. "Economic growth and greenhouse gas emissions," Ecological Economics, Elsevier, vol. 40(1), pages 23-37, January.
  4. Roca, Jordi, 2003. "Do individual preferences explain the Environmental Kuznets curve?," Ecological Economics, Elsevier, vol. 45(1), pages 3-10, April.
  5. Managi, Shunsuke, 2006. "Testing Increasing Returns to Pollution Abatement in Pesticides," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25524, International Association of Agricultural Economists.
  6. Clas Eriksson & Joakim Persson, 2003. "Economic Growth, Inequality, Democratization, and the Environment," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 25(1), pages 1-16, May.
  7. Margrethe Winslow, 2005. "The environmental Kuznets curve revisited once again," Forum for Social Economics, Springer, vol. 35(1), pages 1-18, March.
  8. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August.
  9. Halkos, George & Tzeremes, Nickolaos, 2012. "Regional economic growth and environmental efficiency in greenhouse emissions: A conditional directional distance function approach," MPRA Paper 40015, University Library of Munich, Germany.
  10. Eriksson, Clas & Persson, Joakim, 2002. "Economic Growth, Inequality, Democratization, and the Environment," Working Paper Series 178, Trade Union Institute for Economic Research.
  11. Christoph Lieb, 2004. "The Environmental Kuznets Curve and Flow versus Stock Pollution: The Neglect of Future Damages," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(4), pages 483-506, December.
  12. Halkos, George & Tzeremes, Nickolaos, 2011. "A conditional full frontier modelling for analyzing environmental efficiency and economic growth," MPRA Paper 32839, University Library of Munich, Germany.
  13. Halkos, George & Tzeremes, Nickolaos, 2011. "Kuznets curve and environmental performance: evidence from China," MPRA Paper 34312, University Library of Munich, Germany.
  14. Halkos, George E. & Tzeremes, Nickolaos G., 2013. "Carbon dioxide emissions and governance: A nonparametric analysis for the G-20," Energy Economics, Elsevier, vol. 40(C), pages 110-118.
  15. Alberto Ansuategi, 2003. "Economic Growth and Transboundary Pollution in Europe: An Empirical Analysis," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 26(2), pages 305-328, October.

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