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Empirical Evidence in Ecuador between Economic Growth and Environmental Deterioration

Author

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  • Priscilla Massa-Sánchez

    () (Department of Economics, Universidad Técnica Particular de Loja (UTPL), Loja 11-01-608, Ecuador)

  • Luis Quintana-Romero

    () (Department of Economics, Facultad de Estudios Superiores-FES-Acatlán, Universidad Nacional Autónoma de México, Naucalpan de Juárez 5310, Mexico)

  • Ronny Correa-Quezada

    () (Department of Economics, Universidad Técnica Particular de Loja (UTPL), Loja 11-01-608, Ecuador)

  • María de la Cruz del Río-Rama

    () (Business Management and Marketing Department, Faculty of Business Sciences and Tourism, University of Vigo, 32004 Ourense, Spain)

Abstract

Currently, obtaining evidence of the correlation between economic growth and environmental deterioration is of great relevance. Due to an increase in economic activity, an increase in CO 2 emissions and its possible effects on the current climate change is very worrying. The studies that analyze this correlation serve as a basis for the awareness of countries and the establishment of policies worldwide to curb such deterioration. The objective of this research is achieved through a panel data model and spatial econometric techniques to address the relationship between economic growth and environmental degradation in Ecuador. A regression model is proposed where the deterioration dependent variable is CO 2 emissions, which is also an independent variable for the provincial gross value added. Poverty and inequality are considered as control variables in order to observe their effects on CO 2 emission. The results are coherent with what is stated by the theory and describe an inverted U-shaped curve. They also show that the generation of pollutant emissions is directly related to the growth of the vehicle fleet and inversely related with the population’s schooling levels. The spatial effects are significant and the spatial impact multipliers indicate that the strongest direct and indirect effect is the one caused by the generation of car emissions per capita. This variable is relevant for the design of public policy aimed at improving environmental quality.

Suggested Citation

  • Priscilla Massa-Sánchez & Luis Quintana-Romero & Ronny Correa-Quezada & María de la Cruz del Río-Rama, 2020. "Empirical Evidence in Ecuador between Economic Growth and Environmental Deterioration," Sustainability, MDPI, Open Access Journal, vol. 12(3), pages 1-20, January.
  • Handle: RePEc:gam:jsusta:v:12:y:2020:i:3:p:853-:d:312402
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    References listed on IDEAS

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    Keywords

    economic growth; environmental deterioration; CO 2 emissions; spatial panel models;

    JEL classification:

    • Q - Agricultural and Natural Resource Economics; Environmental and Ecological Economics
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation
    • Q3 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • 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
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products

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