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Public and private spending for environmental protection: a cross-country policy analysis

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  • David Pearce
  • Charles Palmer

Abstract

OECD data are used to investigate public and private environmental expenditures and, although they are more complete and consistent than other datasets, they are still poor. This is important in the context of measuring the benefits of environmental protection, when little is really known about its actual costs. Despite these limitations, this study demonstrates that there has been no shift towards an increasing private sector burden relative to the public sector over time. The paper also finds little evidence to show that environmental expenditures negatively impact on economic growth, although there is inconsistency between the "no effects" finding of the competitiveness literature and the "negative effects" finding of most of the productivity literature. Finally, the elasticity of expenditure with respect to income is found to be 1.2, lower than would be expected if the "environmental demand effect" is significant in explaining the downward slope of the environmental Kuznets curve.

Suggested Citation

  • David Pearce & Charles Palmer, 2001. "Public and private spending for environmental protection: a cross-country policy analysis," Fiscal Studies, Institute for Fiscal Studies, vol. 22(4), pages 403-456, December.
  • Handle: RePEc:ifs:fistud:v:22:y:2001:i:4:p:403-456
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    File URL: http://www.ifs.org.uk/fs/articles/0048a.pdf
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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Caspar Sauter, 2014. "How should we measure environmental policy stringency? A new approach," IRENE Working Papers 14-01, IRENE Institute of Economic Research.
    2. de Melo, Jaime & Mathys, Nicole Andréa, 2010. "Trade and Climate Change: The Challenges Ahead," CEPR Discussion Papers 8032, C.E.P.R. Discussion Papers.
    3. Nguyen-Van, Phu & Pham, Thi Kim Cuong, 2013. "Endogenous fiscal policies, environmental quality, and status-seeking behavior," Ecological Economics, Elsevier, vol. 88(C), pages 32-40.
    4. repec:kap:enreec:v:68:y:2017:i:3:d:10.1007_s10640-016-0040-4 is not listed on IDEAS
    5. Edward B. Barbier & Mikołaj Czajkowski & Nick Hanley, 2017. "Is the Income Elasticity of the Willingness to Pay for Pollution Control Constant?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 68(3), pages 663-682, November.
    6. repec:wsi:jeapmx:v:19:y:2017:i:03:n:s1464333217500168 is not listed on IDEAS
    7. Cormac O'Dea & Ian Preston, 2012. "The distributional impact of public spending in the UK," IFS Working Papers W12/06, Institute for Fiscal Studies.
    8. repec:eee:ecolec:v:142:y:2017:i:c:p:81-90 is not listed on IDEAS
    9. repec:ulp:buopee:v:36:y:2017:m:06:i:4 is not listed on IDEAS
    10. Claire Brunel & Arik Levinson, 2016. "Measuring the Stringency of Environmental Regulations," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 10(1), pages 47-67.
    11. Ching-Yao Irene Lai & C.C. Yang, 2014. "Scale Effect Versus Induced Policy Response In The Environmental Kuznets Curve: The Case Of U.S. Water Pollution," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 435-450, April.

    More about this item

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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