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Economic Growth and the Environment: A Canadian Perspective

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  • Kathleen Day

    ()
    (Department of Economics, University of Ottawa)

  • R. Quentin Grafton

    ()
    (Department of Economics, University of Ottawa & Institute of the Environment)

Abstract

The paper examines the relationship between economic growth and environmental degradation in Canada. Reduced form models are estimated to measure the relationship between GDP and 10 measures of environmental degradation. The reduced form results provide little support for the existence of an Environmental Kuznets Curve (EKC), the view that environmental degradation initially rises with GDP per capita, but reaches a turning point, and then declines. The data are tested for the presence of unit roots and for the existence of cointegration between each of the measures of environmental degradation and income. Cointegration and causality tests indicate that some long-term relationship exists between most measures of environmental degradation and economic growth and that this relationship, in several cases, is bi-directional. The results suggest that a sectoral analysis of the causes of pollution that relate environmental measures to specific anthropogenic causes may provide a better approach to understanding the economic growth-environment relationship.

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File URL: http://www.socialsciences.uottawa.ca/eco/pdf/cahiers/0702E-old.pdf
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Bibliographic Info

Paper provided by University of Ottawa, Department of Economics in its series Working Papers with number 0101E.

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Date of creation: 2001
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Handle: RePEc:ott:wpaper:0101e

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Keywords: environment; economic growth; Canada;

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  1. Isabel Busom, 2000. "An Empirical Evaluation of The Effects of R&D Subsidies," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 9(2), pages 111-148.
  2. Klette, T.J. & Moen, J. & Griliches, Z., 1999. "Do Subsidies to Commercial R&D Reduce Market Failures? Microeconometric Evaluation Studies," Papers 16/99, Norwegian School of Economics and Business Administration-.
  3. Petrakis, Emmanuel & Poyago-Theotoky, Joanna, 2002. "R&D Subsidies versus R&D Cooperation in a Duopoly with Spillovers and Pollution," Australian Economic Papers, Wiley Blackwell, vol. 41(1), pages 37-52, March.
  4. Lakdawalla, Darius & Sood, Neeraj, 2004. "Social insurance and the design of innovation incentives," Economics Letters, Elsevier, vol. 85(1), pages 57-61, October.
  5. Miyagiwa, Kaz & Ohno, Yuka, 2002. "Uncertainty, spillovers, and cooperative R&D," International Journal of Industrial Organization, Elsevier, vol. 20(6), pages 855-876, June.
  6. Ekholm, Karolina & Torstensson, Johan, 1996. "High-Technology Subsidies in General Equilibrium: A Sector-Specific Approach," Working Paper Series 467, Research Institute of Industrial Economics.
  7. Poyago-Theotoky, Joanna, 1998. "R&D Competition in a Mixed Duopoly under Uncertainty and Easy Imitation," Journal of Comparative Economics, Elsevier, vol. 26(3), pages 415-428, September.
  8. Stephen Martin & John T. Scott, 1999. "The Nature of Innovation Market Failure and the Design of Public Support for Private Innovation," CIE Discussion Papers 1999-02, University of Copenhagen. Department of Economics. Centre for Industrial Economics.
  9. Minoru Kitahara & Toshihiro Matsumura, 2006. "Realized Cost-Based Subsidies For Strategic R&D Investments With "Ex Ante" And "Ex Post" Asymmetries," The Japanese Economic Review, Japanese Economic Association, vol. 57(3), pages 438-448.
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