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Economic growth and environmental quality : time series and cross-country evidence

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Author Info
Shafik, Nemat
Bandyopadhyay, Sushenjit
Abstract

The authors explore the relationship between economic growth and environmental quality by analyzing patterns of environmental transformation for countries at different income levels. They look at how eight indicators of environmental quality evolve in response to economic growth and policies across a large number of countries and across time. Several conclusions are drawn; (1) income has the most consistently significant effect on all indicators of environmental quality; (2) many indicators tend to improve as countries approach middle-income levels; (3) technology seems to work in favor of improved environmental quality; (4) the econometric evidence suggests that trade, debt, and other macroeconomic policy variables seem to have little effect on the environment, although some policies can be linked to specific environmental problems; (5) the evidence shows that it is possible to"grow out of"some environmental problems, but there is nothing automatic about doing so - policies and investments to reduce degradation are necessary; and (6) action tends to be taken where there are generalized local costs and substantial private and social benefits.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 904.

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Date of creation: 30 Jun 1992
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Handle: RePEc:wbk:wbrwps:904

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Keywords: Energy and Environment Economic Theory&Research Governance Indicators Inequality Environmental Economics&Policies

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Hendry, David F. & Pagan, Adrian R. & Sargan, J.Denis, 1984. "Dynamic specification," Handbook of Econometrics, in: Z. Griliches† & M. D. Intriligator (ed.), Handbook of Econometrics, edition 1, volume 2, chapter 18, pages 1023-1100 Elsevier. [Downloadable!] (restricted)
  2. Salmon, Pierre, 1987. "Decentralisation as an Incentive Scheme," Oxford Review of Economic Policy, Oxford University Press, vol. 3(2), pages 24-43, Summer.
  3. Gene M. Grossman & Alan B. Krueger, 1991. "Environmental Impacts of a North American Free Trade Agreement," NBER Working Papers 3914, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  1. Strand, Jon, 2003. "Environmental Kuzents curves:Empirical relationships between environmental quality and economic development," Memorandum 04/2002, Oslo University, Department of Economics. [Downloadable!]
  2. Fábio Henrique Granja e Barros & Bernardo Mueller & Jorge Madeira Nogueira, 2007. "Crescimento Econômico E Meio Ambiente: O Que Está Faltando Para Entender O Elo Entre Eles?," Anais do XXXV Encontro Nacional de Economia [Proceedings of the 35th Brazilian Economics Meeting] 100, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics]. [Downloadable!]
  3. Nektarios Aslanidis & Anastasios Xepapadeas, 2004. "Smooth ‘inverted-V-shaped’ & smooth ‘N-shaped’ pollution-income paths," Working Papers 0405, University of Crete, Department of Economics. [Downloadable!]
  4. Robert T. Deacon, . "The Political Economy of Environment-Development Relationships: A Preliminary Framework," University of California at Santa Barbara, Economics Working Paper Series 11-99, Department of Economics, UC Santa Barbara. [Downloadable!]
  5. Jha, Raghbendra & Bhanu Murthy, KV, 2001. "An Inverse Global Environmental Kuznets Curve," Departmental Working Papers 2001-02, Australian National University, Economics RSPAS. [Downloadable!]
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  6. Henning Bohn & Robert T. Deacon, 2000. "Ownership Risk, Investment, and the Use of Natural Resources," American Economic Review, American Economic Association, vol. 90(3), pages 526-549, June. [Downloadable!] (restricted)
    Other versions:
  7. Levy, Amnon, 2002. "Greening the Neoclassical Optimal Economic Growth Model," Economics Working Papers wp02-05, School of Economics, University of Wollongong, NSW, Australia. [Downloadable!]
  8. Inmaculada Martínez-Zarzoso & Aurelia Bengochea-Morancho, 2003. "Testing for an environmental Kuznets curve in Latin-American countries," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Economics Department, vol. 18(1), pages 3-26, June. [Downloadable!]
  9. David Maradan & Anatoli Vassiliev, 2005. "Marginal Costs of Carbon Dioxide Abatement: Empirical Evidence from Cross-Country Analysis," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 377-410, September. [Downloadable!]
  10. Giovanni Dosi & Marco Grazzi, 2006. "Energy, Development, and the Environment: An Appraisal Three Decades After the "Limits to Growth" Debate," LEM Papers Series 2006/15, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy. [Downloadable!]
  11. Charles D. Kolstad Yuqing Xing, . "Do Lax Environmental Regulations Attract Foreign Investment? (Part 1) (Part 2)," University of California at Santa Barbara, Economics Working Paper Series 28-98, Department of Economics, UC Santa Barbara. [Downloadable!]
  12. Auci Sabrina & Becchetti Leonardo & Rando Luca, 2006. "Testing crucial model assumptions: the income/willingness to pay for the environment nexus in the Environmental Kutznetz Curve," Departmental Working Papers 239, Tor Vergata University, CEIS. [Downloadable!]
  13. David I. Stern, 2003. "The Rise and Fall of the Environmental Kuznets Curve," Rensselaer Working Papers in Economics 0302, Rensselaer Polytechnic Institute, Department of Economics. [Downloadable!]
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  14. Douglas Holtz-Eakin & Thomas M. Selden, 1992. "Stoking the Fires? Co2 Emissions and Economic Growth," NBER Working Papers 4248, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  15. Maximilian Auffhammer & Richard Carson, 2007. "Forecasting the Path of China's CO2 Emissions Using Province Level Information," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series 971, Department of Agricultural & Resource Economics, UC Berkeley. [Downloadable!]
  16. David I. Stern, 1996. "Progress on environmental Kuznets curves," Working Papers in Ecological Economics 9601, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program. [Downloadable!]
  17. Raghbendra Jha & John Whalley, 1999. "The Environmental Regime in Developing Countries," NBER Working Papers 7305, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  18. Osman Zaim & Fatma Taskin, 2000. "A Kuznets Curve in Environmental Efficiency: An Application on OECD Countries," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 17(1), pages 21-36, September. [Downloadable!] (restricted)
  19. David I. Stern & Tony Auld & Michael S. Common & Kali K. Sanyal, 1998. "Is there an environmental Kuznets curve for sulfur?," Working Papers in Ecological Economics 9804, Australian National University, Centre for Resource and Environmental Studies, Ecological Economics Program. [Downloadable!]
    Other versions:
  20. Jordi Roca & Emilio Padilla & Mariona Farré & Vittorio Galletto, 2001. "Economic growth and atmospheric pollution in Spain: discussing the environmental Kuznets curve by hypothesis," Working Papers wp0101, Department of Applied Economics at Universitat Autonoma of Barcelona. [Downloadable!]
  21. Feridun, Mete, 2006. "Impact of Trade Liberalization on the Environment in Developing Countries: The Case of Nigeria," MPRA Paper 731, University Library of Munich, Germany. [Downloadable!]
  22. Yuquing Xing & Charles Kolstad, 2002. "Do Lax Environmental Regulations Attract Foreign Investment?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(1), pages 1-22, January. [Downloadable!] (restricted)
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