Growth and Pollution Convergence: Theory and Evidence
AbstractStabilizing pollution levels in the long run is a pre-requisite for sustainable growth. We develop a neoclassical growth model with endogenous emission reduction predicting that, along optimal sustainable paths, pollution growth rates are (i) positively related to output growth (scale effect) and (ii) negatively related to emission levels (defensive effect). This dynamic law reduces to a convergence equation that is empirically tested for two major and regulated air pollutants - sulfur oxides and nitrogen oxides - with a panel of 25 European countries spanning the years 1980-2005. Traditional parametric models are rejected by the data. More flexible regression techniques confirm the existence of both the scale and the defensive effect, supporting the model predictions.
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Bibliographic InfoPaper provided by University of Guelph, Department of Economics and Finance in its series Working Papers with number 1106.
Date of creation: 2011
Date of revision:
Air pollution; convergence; economic growth; nonparametric regressions.;
Other versions of this item:
- Ordás Criado, C. & Valente, S. & Stengos, T., 2011. "Growth and pollution convergence: Theory and evidence," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 199-214, September.
- C. Ordás Criado & S. Valente & T. Stengos, 2011. "Growth and Pollution Convergence: Theory and Evidence," Working Paper Series 33_11, The Rimini Centre for Economic Analysis.
- C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
- O13 - Economic Development, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-07-02 (All new papers)
- NEP-ENE-2011-07-02 (Energy Economics)
- NEP-ENV-2011-07-02 (Environmental Economics)
- NEP-RES-2011-07-02 (Resource Economics)
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