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Air pollution during growth : accounting for governance and vulnerability

  • Hamilton, Kirk
  • Dasgupta, Susmita
  • Pandey, Kiran
  • Wheeler,David R.

New research on urban air pollution casts doubt on the conventional view of the relationship between economic growth and environmental quality. This view holds that pollution automatically increases until societies reach middle-income status because poor countries have neither the institutional capacity nor the political commitment necessary to regulate polluters. Some policymakers and researchers have cited this model (called the"environmental Kuznets curve,"or EKC) when arguing that developing countries should"grow first, clean up later."However, new evidence suggests that the EKC model is misleading because it mistakenly assumes that strong environmental governance is not possible for poor countries. As the authors show in this paper, the empirical relationship between pollution and income becomes much weaker when measures of governance are added to the analysis. Their results also suggest that previous research has underestimated the effect of geographic vulnerability (climate and terrain factors) on air quality. The authors find that weak governance and geographic vulnerability alone can account for the crisis levels of air pollution in many developing country cities. When these factors are combined with income and population effects, the authors have a sufficient explanation for the fact that some cities already have air quality comparable to levels in OECD urban areas. To summarize, their results suggest that the maxim"grow first, clean up later"is too simplistic. Appropriate urban growth strategies can steer development toward cities with lower geographic vulnerability, and governance reform can reduce air pollution significantly, long before countries reach middle-income status.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3383.

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Date of creation: 01 Aug 2004
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Handle: RePEc:wbk:wbrwps:3383
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  1. Stern, David I. & Common, Michael S., 2001. "Is There an Environmental Kuznets Curve for Sulfur?," Journal of Environmental Economics and Management, Elsevier, vol. 41(2), pages 162-178, March.
  2. Wheeler, David, 2001. "Racing to the bottom : foreign investment and air pollution in developing countries," Policy Research Working Paper Series 2524, The World Bank.
  3. Grossman, Gene & Krueger, Alan B, 1992. "Environmental Impacts of a North American Free Trade Agreement," CEPR Discussion Papers 644, C.E.P.R. Discussion Papers.
  4. Susmita Dasgupta & Benoit Laplante & Hua Wang & David Wheeler, 2002. "Confronting the Environmental Kuznets Curve," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 147-168, Winter.
  5. Stern , David I., 1998. "Progress on the environmental Kuznets curve?," Environment and Development Economics, Cambridge University Press, vol. 3(02), pages 173-196, May.
  6. McCONNELL, KENNETH E., 1997. "Income and the demand for environmental quality," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 383-399, November.
  7. Hettige, Hemamala & Martin, Paul & Singh, Manjula & Wheeler,David R., 1995. "The industrial pollution projection system," Policy Research Working Paper Series 1431, The World Bank.
  8. Hettige, Hemamala & Mani, Muthukumara & Wheeler, David, 2000. "Industrial pollution in economic development: the environmental Kuznets curve revisited," Journal of Development Economics, Elsevier, vol. 62(2), pages 445-476, August.
  9. Selden Thomas M. & Song Daqing, 1995. "Neoclassical Growth, the J Curve for Abatement, and the Inverted U Curve for Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 162-168, September.
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