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Economic growth, industrialization, and the environment

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  • Cherniwchan, Jevan

Abstract

In this paper, I argue the compositional shift from agricultural to industrial production – industrialization – is a central determinant of changes in environmental quality as economies develop. I develop a simple two-sector model of neoclassical growth and the environment in a small open economy to examine how industrialization affects the environment. The model is estimated using sulfur emissions data for 157 countries over the period 1970–2000. The results show the process of industrialization is a significant determinant of observed changes in emissions: a 1% increase in industry's share of total output is associated with an 11.8% increase in the level of emissions per capita.

Suggested Citation

  • Cherniwchan, Jevan, 2012. "Economic growth, industrialization, and the environment," Resource and Energy Economics, Elsevier, vol. 34(4), pages 442-467.
  • Handle: RePEc:eee:resene:v:34:y:2012:i:4:p:442-467 DOI: 10.1016/j.reseneeco.2012.04.004
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    More about this item

    Keywords

    Environment; Economic growth; Industrialization; Pollution;

    JEL classification:

    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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