IDEAS home Printed from https://ideas.repec.org/p/tin/wpaper/20050018.html
   My bibliography  Save this paper

Geographical Economics and the Role of Pollution on Location

Author

Listed:
  • Charles van Marrewijk

    (Faculty of Economics, Erasmus Universiteit Rotterdam)

Abstract

Geographical economics analyzes the endogenous determination of the location of economic activity in a general equilibrium framework. We investigate the impact of pollution by focusing on the interaction between location advantages and negative pollution externalities associated with local production. We distinguish between two goods (food and manufactures) and two factors of production (mobile human capital and immobile unskilled labor) and show that agglomeration of economic activity tends to become less attractive with pollution, and thus less likely. Moreover, we provide a simple necessary and sufficient condition for the spreading of economic activity to become more attractive, and thus more likely.

Suggested Citation

  • Charles van Marrewijk, 2005. "Geographical Economics and the Role of Pollution on Location," Tinbergen Institute Discussion Papers 05-018/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20050018
    as

    Download full text from publisher

    File URL: https://papers.tinbergen.nl/05018.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Joeri Gorter & Ruud de Mooij, 2001. "Capital income taxation in Europe; trends and trade-offs," CPB Special Publication 30, CPB Netherlands Bureau for Economic Policy Analysis.
    2. Fredrik Andersson & Rikard Forslid, 2003. "Tax Competition and Economic Geography," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(2), pages 279-303, April.
    3. van Marrewijk, Charles & van der Ploeg, Federick & Verbeek, Jos, 1993. "Is growth bad for the environment? Pollution, abatement, and endogenous growth," Policy Research Working Paper Series 1151, The World Bank.
    4. Smulders, Sjak & Gradus, Raymond, 1996. "Pollution abatement and long-term growth," European Journal of Political Economy, Elsevier, vol. 12(3), pages 505-532, November.
    5. Grimaud, Andre & Rouge, Luc, 2003. "Non-renewable resources and growth with vertical innovations: optimum, equilibrium and economic policies," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 433-453, March.
    6. Eric O'N. Fisher & Charles van Marrewijk, 1998. "Pollution and economic growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(1), pages 55-69.
    7. Garg, Prem C. & Sweeney, James L., 1978. "Optimal growth with depletable resources," Resources and Energy, Elsevier, vol. 1(1), pages 43-56, September.
    8. Smulders, Sjak & van Soest, Daan & Withagen, Cees, 2004. "International trade, species diversity, and habitat conservation," Journal of Environmental Economics and Management, Elsevier, vol. 48(2), pages 891-910, September.
    9. Ottaviano, Gianmarco I. P., 2001. "Monopolistic competition, trade, and endogenous spatial fluctuations," Regional Science and Urban Economics, Elsevier, vol. 31(1), pages 51-77, February.
    10. Edward Barbier, 1999. "Endogenous Growth and Natural Resource Scarcity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 14(1), pages 51-74, July.
    11. J.Peter Neary, 2001. "Of Hype and Hyperbolas: Introducing the New Economic Geography," Journal of Economic Literature, American Economic Association, vol. 39(2), pages 536-561, June.
    12. Krugman, Paul, 1991. "Increasing Returns and Economic Geography," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 483-499, June.
    13. repec:dgr:rugccs:200209 is not listed on IDEAS
    14. Olli Tahvonen, 1997. "Fossil Fuels, Stock Externalities, and Backstop Technology," Canadian Journal of Economics, Canadian Economics Association, vol. 30(4), pages 855-874, November.
    15. Poul Schou, 2000. "Polluting Non-Renewable Resources and Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(2), pages 211-227, June.
    16. Christian Scholz & Georg Ziemes, 1999. "Exhaustible Resources, Monopolistic Competition, and Endogenous Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 13(2), pages 169-185, March.
    17. Kolstad, Charles D. & Krautkraemer, Jeffrey A., 1993. "Natural resource use and the environment," Handbook of Natural Resource and Energy Economics, in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 26, pages 1219-1265, Elsevier.
    18. Brakman, Steven & Garretsen, Harry & Marrewijk, Charles van, 2002. "Locational competition and agglomeration: the role of government spending," CCSO Working Papers 200209, University of Groningen, CCSO Centre for Economic Research.
    19. repec:dgr:rugsom:02c75 is not listed on IDEAS
    20. Tahvonen, Olli & Salo, Seppo, 2001. "Economic growth and transitions between renewable and nonrenewable energy resources," European Economic Review, Elsevier, vol. 45(8), pages 1379-1398, August.
    21. Forslid, Rikard, 1999. "Agglomeration with Human and Physical Capital: an Analytically Solvable Case," CEPR Discussion Papers 2102, C.E.P.R. Discussion Papers.
    22. Jeroen C.J.M. van den Bergh (ed.), 1999. "Handbook of Environmental and Resource Economics," Books, Edward Elgar Publishing, number 801.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Bouwe R. Dijkstra, 2022. "Payments from Households to Distant Polluting Firms," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 82(3), pages 681-715, July.
    2. Jiayuan Zhou & Yunxia Li & Bo Li, 2022. "Restructure or Misallocation? Enterprises’ Carbon Emission Intensity under Market Integration," Sustainability, MDPI, vol. 14(24), pages 1-18, December.
    3. Eppink, Florian V. & Withagen, Cees A., 2009. "Spatial patterns of biodiversity conservation in a multiregional general equilibrium model," Resource and Energy Economics, Elsevier, vol. 31(2), pages 75-88, May.
    4. Martin F. Quaas & Sjak Smulders, 2018. "Brown Growth, Green Growth, and the Efficiency of Urbanization," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 71(2), pages 529-549, October.
    5. Sonia Ben Kheder & Natalia Zugravu, 2008. "The pollution haven hypothesis: a geographic economy model in a comparative study," Post-Print halshs-00344845, HAL.
    6. Dean M. Hanink, 2010. "Perspectives on Regional Change: A Review Essay on Handbook of Regional Growth and Development Theories," Growth and Change, Wiley Blackwell, vol. 41(1), pages 3-27, March.
    7. Birgit Bednar-Friedl & Olivia Koland & Karl Steininger, 2011. "Urban sprawl and policy responses: a general equilibrium analysis of residential choice," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 54(1), pages 145-168.
    8. Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2010. "Environmental Policy and the Collapse of the Monocentric City," DEOS Working Papers 1021, Athens University of Economics and Business.
    9. Ben Kheder, Sonia & Zugravu, Natalia, 2012. "Environmental regulation and French firms location abroad: An economic geography model in an international comparative study," Ecological Economics, Elsevier, vol. 77(C), pages 48-61.
    10. Schindler, Mirjam & Caruso, Geoffrey & Picard, Pierre, 2017. "Equilibrium and first-best city with endogenous exposure to local air pollution from traffic," Regional Science and Urban Economics, Elsevier, vol. 62(C), pages 12-23.
    11. Rauscher, Michael, 2009. "Concentration, separation, and dispersion: Economic geography and the environment," Thuenen-Series of Applied Economic Theory 109, University of Rostock, Institute of Economics.
    12. Wu, JunJie & Segerson, Kathleen & Wang, Chunhua, 2023. "Is environmental regulation the answer to pollution problems in urbanizing economies?," Journal of Environmental Economics and Management, Elsevier, vol. 117(C).
    13. Grazi, Fabio & van den Bergh, Jeroen C.J.M. & Rietveld, Piet, 2006. "Modeling Spatial Sustainability: Spatial Welfare Economics versus Ecological Footprint," Sustainability Indicators and Environmental Valuation Working Papers 12212, Fondazione Eni Enrico Mattei (FEEM).
    14. Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2011. "Spatial location decisions under environmental policy and housing externalities," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 13(3), pages 195-217, September.
    15. Anastasios Xepapadeas & Efthymia Kyriakopoulou, 2009. "Environmental Policy, Spatial Spillovers and the Emergence of Economic Agglomerations," Working Papers 2009.70, Fondazione Eni Enrico Mattei.
    16. Yingming Zhu & Yuan Li & Yi Wang & Lingfeng Li, 2021. "The Impact of Water and Soil Scarcity and Pollution on Industrial Agglomeration: Evidence from China," Sustainability, MDPI, vol. 13(10), pages 1-18, May.
    17. Kyriakopoulou, Efthymia & Xepapadeas, Anastasios, 2013. "Environmental policy, first nature advantage and the emergence of economic clusters," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 101-116.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Grimaud, Andre & Rouge, Luc, 2005. "Polluting non-renewable resources, innovation and growth: welfare and environmental policy," Resource and Energy Economics, Elsevier, vol. 27(2), pages 109-129, June.
    2. Silva, Susana & Soares, Isabel & Afonso, Oscar, 2013. "Economic and environmental effects under resource scarcity and substitution between renewable and non-renewable resources," Energy Policy, Elsevier, vol. 54(C), pages 113-124.
    3. repec:dgr:rugsom:02c75 is not listed on IDEAS
    4. Brakman, Steven & Garretsen, Harry & Marrewijk, Charles van, 2002. "Locational competition and agglomeration: the role of government spending," CCSO Working Papers 200209, University of Groningen, CCSO Centre for Economic Research.
    5. David I. Stern, 2010. "The Role of Energy in Economic Growth," CCEP Working Papers 0310, Centre for Climate & Energy Policy, Crawford School of Public Policy, The Australian National University.
    6. Pfluger, Michael, 2004. "A simple, analytically solvable, Chamberlinian agglomeration model," Regional Science and Urban Economics, Elsevier, vol. 34(5), pages 565-573, September.
    7. Wei Jin & ZhongXiang Zhang, 2018. "Capital Accumulation, Green Paradox, and Stranded Assets: An Endogenous Growth Perspective," Working Papers 2018.33, Fondazione Eni Enrico Mattei.
    8. Silva, Susana & Soares, Isabel & Afonso, Oscar, 2013. "Economic growth and polluting resources: Market equilibrium and optimal policies," Economic Modelling, Elsevier, vol. 30(C), pages 825-834.
    9. Giuseppe Di Vita, 2004. "Natural Resources Dynamics: Another Look," Working Papers 2004.110, Fondazione Eni Enrico Mattei.
    10. Di Vita, Giuseppe, 2006. "Natural resources dynamics: Exhaustible and renewable resources, and the rate of technical substitution," Resources Policy, Elsevier, vol. 31(3), pages 172-182, September.
    11. Lucas Bretschger, 2016. "Is the Environment Compatible with Growth? Adopting an Integrated Framework," CER-ETH Economics working paper series 16/260, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
    12. Agnani, Betty & Gutierrez, Maria-Jose & Iza, Amaia, 2005. "Growth in overlapping generation economies with non-renewable resources," Journal of Environmental Economics and Management, Elsevier, vol. 50(2), pages 387-407, September.
    13. Grimaud, André & Magné, Bertrand & Rougé, Luc, 2009. "Polluting Non-Renewable Resources, Carbon Abatement and Climate Policy in a Romer Growth Model," TSE Working Papers 09-023, Toulouse School of Economics (TSE).
    14. Ricci, Francesco, 2007. "Channels of transmission of environmental policy to economic growth: A survey of the theory," Ecological Economics, Elsevier, vol. 60(4), pages 688-699, February.
    15. Jouvet, Pierre-André & Schumacher, Ingmar, 2012. "Learning-by-doing and the costs of a backstop for energy transition and sustainability," Ecological Economics, Elsevier, vol. 73(C), pages 122-132.
    16. Kurt A. Hafner, 2015. "Tax Competition and Economic Integration," Review of Development Economics, Wiley Blackwell, vol. 19(1), pages 45-61, February.
    17. Fabien Candau, 2008. "Entrepreneurs' Location Choice And Public Policies: A Survey Of The New Economic Geography," Journal of Economic Surveys, Wiley Blackwell, vol. 22(5), pages 909-952, December.
    18. Karen Pittel & Lucas Bretschger, 2010. "The implications of heterogeneous resource intensities on technical change and growth," Canadian Journal of Economics, Canadian Economics Association, vol. 43(4), pages 1173-1197, November.
    19. Borck, Rainald & Pfluger, Michael, 2006. "Agglomeration and tax competition," European Economic Review, Elsevier, vol. 50(3), pages 647-668, April.
    20. Dagmar Nelissen & Till Requate, 2007. "Pollution-reducing and resource-saving technological progress," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 6(1), pages 5-44.

    More about this item

    Keywords

    Geographical Economics; Pollution; Location;
    All these keywords.

    JEL classification:

    • F0 - International Economics - - General
    • Q0 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General
    • R0 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tin:wpaper:20050018. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Tinbergen Office +31 (0)10-4088900 (email available below). General contact details of provider: https://edirc.repec.org/data/tinbenl.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.