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Diffusion of Emissions Abating Technology

  • David I. Stern


    (Department of Economics, Rensselaer Polytechnic Institute, Troy, NY 12180-3590, USA)

The environmental Kuznets curve (EKC) has been extensively criticized on econometric and theoretical grounds. Recent econometric results and case studies show that national emissions of important pollutants are monotonic in income but changes in technology can lead over time to reductions in pollution - a lowering of the EKC - and that pollution reducing innovations and standards may be adopted with relatively short time lags in some developing countries. This study combines the recent literature on measuring environmental efficiency and technological change using production frontier methods with the use of the Kalman filter - a time series method for signal extraction - to model the state of abatement technology in a panel of countries over time. The EKC is reformulated as the best practice technology frontier - countries' position relative to the frontier reflects the degree to which they have adopted best practice. The results are used to determine whether countries are converging to best practice over time and how many years it will take each country to achieve current best practice. The model is applied to sulfur dioxide emissions from sixteen mainly developed countries.

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Paper provided by Rensselaer Polytechnic Institute, Department of Economics in its series Rensselaer Working Papers in Economics with number 0420.

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Date of creation: Sep 2004
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Handle: RePEc:rpi:rpiwpe:0420
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