Income and environmental R&D: empirical evidence from OECD countries

Abstract

This paper extends previous empirical studies of the environmental Kuznets curve by examining the role of rising incomes in promoting development of new technologies directed toward environmental improvements. The main result, based on an analysis of data from 19 OECD countries for the period 1980-94, shows that the income elasticity of public research and development funding for environmental protection is positive, and may be close to unity. This finding suggests that emissions of at least some pollutants may decline with income after a threshold level of income is reached. However, this should be interpreted cautiously in light of: (1) the small size of public research and development funding relative to overall spending on environmental protection, (2) the ability of a country to substitute between public and private research and development expenditures, as well as among alternative policy instruments, and (3) the possibility that public research and development funding may be a form of industrial subsidy in some countries.

Environmental degradation in France: The effects of FDI, financial development, and energy innovations

“…Growth effect indicates that financial development boosts economic activity by encouraging investment activities, which increases per capita income, resulting in a higher energy consumption and carbon emissions as well (Chang, 2015;Mahalik et al, 2017). Research and development expenditures in the energy sector induce energy innovations, which lowers energy intensity and improves environmental quality by lowering carbon emissions (Komen et al 1997;BalsalobreLorente et al, 2018 (2) where the variables are the natural logs of those in Eq. (1) and the error term is assumed to be normally distributed.…”

Time-varying analysis of CO2 emissions, energy consumption, and economic growth nexus: Statistical experience in next 11 countries

“…EKC, indicating that environmental degradation initially increases with the increased income level, reaches a crucial point of maximum income and then it declines with increased income level. More specifically, the EKC hypothesis further reveals that environmental pollution changes from an inferior good at lower income levels to a normal good at higher income levels (Ajmi et al 2015) suggesting two pertinent issues for higher and lower levels of environmental pollution linked with income levels of an economy: i) In early stages of industrialisation, increasing environmental pollution is the cause of growing income levels in the short-run as industrial firms and households consume greater amounts of energy for both production and consumption purposes; additionally, people are more interested in earning higher income than protecting the quality of the environment and thereby people's respect towards a clean environment declines, ii) Clean environmental policy, structural change, technological advancements, increasing awareness of the people, governments, and academic efforts are responsible for reducing environmental pollution with the passage of higher income levels in the long run (Grossman and Krueger 1993, Komen et al 1997, Roca 2003, Kijima et al 2010, Shahbaz et al 2013a, Onafowora and Owoye 2014, Baek 2015.…”

Are consensus democracies more environmentally effective?

“…One work examining OECD countries has claimed that as per capita income increases, public spending for environmental protection also grows (Komen et al 1997). Carson et al (1997) found that in the United States local environmental policy effectiveness and regulatory structures appear to correlate positively with absolute income levels across the various states.…”