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The Factors Behind CO2 Emission Reduction in Transition Economies

Author

Listed:
  • Katrin Millock

    (University Paris 1 Panthéon-Sorbonne)

  • Natalia Zugravu

    (University Paris 1 Panthéon-Sorbonne)

  • Gérard Duchene

    (ERUDITE, University Paris 12)

Abstract

The Central and Eastern European countries significantly reduced their carbon dioxide (CO2) emissions between 1995 and 2003. Was this emission reduction just the fortuitous result of the major economic transformation undergone by countries in the transition? Or is it rather a result of more stringent environmental policy? The objective of the article is to answer this question through a simultaneous equation model of the demand (emissions) and supply (environmental stringency) of pollution. The supply equation takes into account the institutional quality of the country as well as consumer preferences for environmental quality. The results indicate that, all else equal, output growth would have increased industrial CO2 emissions in the Central and Eastern European countries in our sample by 31% between 1995 and 2003, and the composition effect corresponded to an increase of 8.4% of emissions. Nevertheless, the technique effect, induced by more stringent environmental policy, reduced industrial CO2 emissions by 58%, and allowed for a final beneficial result for the environment, i.e., -18% of industrial CO2 emissions in 2003 compared to 1995. Finally, our study confirms the importance of institutional factors in the explanation and further prediction of pollution reduction in transition economies.

Suggested Citation

  • Katrin Millock & Natalia Zugravu & Gérard Duchene, 2008. "The Factors Behind CO2 Emission Reduction in Transition Economies," Working Papers 2008.58, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2008.58
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    Cited by:

    1. Giovanni Marin & Massimiliano Mazzanti, 2009. "The dynamics of delinking in industrial emissions: The role of productivity, trade and R&D," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 91-117.
    2. Nicole Grunewald & Inmaculada Martínez-Zarzoso, 2009. "Driving Factors of Carbon Dioxide Emissions and the Impact from Kyoto Protocol," Ibero America Institute for Econ. Research (IAI) Discussion Papers 190, Ibero-America Institute for Economic Research.
    3. Zugravu-Soilita, Natalia, 2017. "Trade in Environmental Goods: Empirical Exploration of Direct and Indirect Effects on Pollution by Country’s Trade Status," EIA: Climate Change: Economic Impacts and Adaptation 266287, Fondazione Eni Enrico Mattei (FEEM).
    4. Natalia Zugravu-Soilita, 2018. "The impact of trade in environmental goods on pollution: what are we learning from the transition economies’ experience?," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 20(4), pages 785-827, October.
    5. Tamazian, Artur & Bhaskara Rao, B., 2010. "Do economic, financial and institutional developments matter for environmental degradation? Evidence from transitional economies," Energy Economics, Elsevier, vol. 32(1), pages 137-145, January.
    6. Natalia Zugravu-Soilita, 2019. "Trade in Environmental Goods and Air Pollution: A Mediation Analysis to Estimate Total, Direct and Indirect Effects," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 74(3), pages 1125-1162, November.
    7. Marin, Giovanni & Mazzanti, Massimiliano, 2009. "Emissions Trends, Labour Productivity Dynamics and Time-Related Events - Sector Heterogeneous Analyses of Decoupling/Recoupling on a 1990-2006 NAMEA," MPRA Paper 20087, University Library of Munich, Germany.
    8. Wen-Lin Wu, 2017. "Institutional Quality and Air Pollution: International Evidence," International Journal of Business and Economics, School of Management Development, Feng Chia University, Taichung, Taiwan, vol. 16(1), pages 49-74, June.
    9. Giovanni Marin & Massimiliano Mazzanti, 2013. "The evolution of environmental and labor productivity dynamics," Journal of Evolutionary Economics, Springer, vol. 23(2), pages 357-399, April.
    10. Drago Papler & Štefan Bojnec, 2015. "Competitiveness and Factors of Delivery of Electricity," Faculty of Management Koper Monograph Series, University of Primorska, Faculty of Management Koper, number 978-961-266-188-5, June.
    11. Batrancea Larissa & Rathnaswamy Malar Maran & Batrancea Ioan & Nichita Anca & Rus Mircea-Iosif & Tulai Horia & Fatacean Gheorghe & Masca Ema Speranta & Morar Ioan Dan, 2020. "Adjusted Net Savings of CEE and Baltic Nations in the Context of Sustainable Economic Growth: A Panel Data Analysis," JRFM, MDPI, vol. 13(10), pages 1-17, October.
    12. Sun, Chuanwang & Zhang, Wenyue & Fang, Xingming & Gao, Xiang & Xu, Meilian, 2019. "Urban public transport and air quality: Empirical study of China cities," Energy Policy, Elsevier, vol. 135(C).
    13. Gaygysyz Ashyrov & Helen Poltimäe, 2022. "Does Corruption Hinder Firm Energy Efficiency? Evidence From Vietnam," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 137, Faculty of Economics and Business Administration, University of Tartu (Estonia).
    14. Hbib Sekrafi & Asma Sghaier, 2018. "Examining the Relationship Between Corruption, Economic Growth, Environmental Degradation, and Energy Consumption: a Panel Analysis in MENA Region," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 9(3), pages 963-979, September.

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    More about this item

    Keywords

    Transition; CO2 Emissions; Environmental Policy; Scale; Composition and Technique Effects;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • D72 - Microeconomics - - Analysis of Collective Decision-Making - - - Political Processes: Rent-seeking, Lobbying, Elections, Legislatures, and Voting Behavior
    • P5 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems
    • P27 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Performance and Prospects
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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