Industrial pollution in economic development: the environmental Kuznets curve revisited

Hettige, Hemamala; Mani, Muthukumara; Wheeler, David

doi:10.1016/s0304-3878(00)00092-4

Cited by 292 publications

(141 citation statements)

References 30 publications

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“…11 In the absence of factor price equalisation through trade, if within-sector differences in technology are Hicks neutral, a labor-abundant poor country will use a more labor intensive technique of production. Thus constant emissions per unit of labor would be consistent with higher emission intensities per unit of output in low-income countries Fourth, the constancy of emissions intensities by worker is in accordance with the evidence in Hettige et al (2000) who found that emissions per employee are roughly constant across countries for one of our pollutants, biochemical oxygen demand in water (BOWT).…”

Section: Measuring the Pcisupporting

confidence: 86%

“…Note that these IPP coefficients are strictly speaking only available for 1987 for the US industries. Hettige, Mani and Wheeler (2000) show that pollution/labor ratios seem to be roughly constant across countries. Hence using employment/output ratios by 3-digit industry (4-digit data are not available) and country from the "Trade and Production Database" allows us to compute a pollution per dollar of import coefficient specific to each country.…”

Section: Unravelling the Worldwide Pollution Haven Effectmentioning

confidence: 93%

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Unravelling the worldwide pollution haven effect

Grether

Mathys

Mélo

2012

The Journal of International Trade & Economic Development

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SummaryThis paper tackles the "pollution haven" argument by estimating the pollution content of imports (PCI). The PCI is then decomposed into three components: (i) a "deep" component (i.e. traditional variables unrelated to the environmental debate); (ii) a factor endowment component and (iii) a "pollution haven" component reflecting the impact of differences in environmental policies. The estimation is carried out for 1987 for an extensive data set covering 10 pollutants, 48 countries and 79 ISIC 4-digit sectors. Decompositions based on cross-section econometric estimates suggest a significant pollution haven effect which increases the PCI of the North because of stricter environmental regulations in the North. At the same time, the factor endowment effect lowers the PCI of the North, as the North is relatively well-endowed in capital and pollution-intensive activities are capital intensive. On a global scale, because the bulk of trade is intra-regional with a high North-North share, these effects are small relative to the "deep" determinants of the worldwide PCI. In sum, differences in factor endowments and environmental policies have only marginally affected the PCI of world trade at the end of the eighties. Keywords: Trade and The Environment, Pollution Haven Effect, Factor Endowment Effect JEL Classification: F18, Q56We thank Werner Antweiler, Andrea Baranzini, Marius Brülhart, Olivier Cadot, Matthew Cole, Céline Carrère, Robert Elliott, Gene Grossman, Jaya Krishnakumar, Bernard Sinclair-Desgagné, Scott Taylor, David Wheeler, two referees and participants at the ETSG meeting in Dublin (2005) and a seminar at the PSE in 2007 for comments on an earlier draft. This is an extensively revised version of Grether et al. (2006) AbstractThis paper tackles the "pollution haven" argument by estimating the pollution content of imports (PCI). The PCI is then decomposed into three components: (i) a "deep" component JEL Classification numbers: F18, Q56Key Words: Trade and the environment, pollution haven effect, factor endowment effect 1 We thank

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Section: Measuring the Pcisupporting

confidence: 86%

Section: Unravelling the Worldwide Pollution Haven Effectmentioning

confidence: 93%

Unravelling the worldwide pollution haven effect

Grether

Mathys

Mélo

2012

The Journal of International Trade & Economic Development

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“…Antweiler et al (2001) develop an econometric model of the effects of trade on environmental quality which includes capital/labor abundance but no energy data. Hilton and Levinson (1998) and Hettige et al (2000) decompose emissions into different components, which are then regressed on other variables including income in the same style as the EKC. The various predicted components can then be reassembled to predicted total emissions.…”

Section: Decomposing Emissionsmentioning

confidence: 99%

“…As Gallagher (2003) suggests, these innovations may be adopted with a relatively short lag in developing countries. Hettige et al (2000) use a similar approach to model industrial BOD emissions in a range of developing and developed countries. The share of manufacturing industry in national income and the share of polluting industries within total manufacturing represent composition effects and actual plant level end of pipe BOD emissions per unit output represent technique effects.…”

Section: Decomposing Emissionsmentioning

confidence: 99%

The Rise and Fall of the Environmental Kuznets Curve

2004

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This paper chronicles the story of the environmental Kuznets curve (EKC). The EKC proposes that indicators of environmental degradation first rise, and then fall with increasing income per capita. However, recent evidence shows that developing countries are addressing environmental issues, sometimes adopting developed country standards with a short time lag and sometimes performing better than some wealthy countries, and that the EKC results have a very flimsy statistical foundation. A new generation of decomposition models can help disentangle the true relations between development and the environment.

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“…There have been some empirical efforts to test whether structural change affects the income-pollution pattern, trying eventually to capture its influence. Thus, some authors have included in their reduced-form regressions a variable representing the structure of the economy 5 (for example, Suri and Chapman 1998;Hettige et al 2000, find that a higher share of industry in total GDP is associated with higher environmental pressure). Others have used decomposition analysis to measure the influence of structural change in reducing the pollution intensity of economic activity (for example, de Bruyn 1997;Weber 2009).…”

Section: Structural Change and The Income-pollution Relationshipmentioning

confidence: 99%

The Environmental Kuznets Curve and the Structural Change Hypothesis

Marsiglio

Ansuategi

Gallastegui

2015

Environ Resource Econ

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We provide a very simple macroeconomic investigation of the role that structural changes might play in generating inverted U-shaped income-pollution relationships. Differently from previous research which mainly focuses on empirical, static or general equilibrium models, we develop a standard balanced growth path (BGP) analysis. We show that along the BGP equilibrium an inverted U-shaped income-pollution relationship may occur as a response to structural changes, but whether this is the case or not it will crucially depend upon the magnitude of a production externality parameter. Moreover, we show that the negative relationship between income and pollution can only be a transitory phenomenon, and in the long run pollution will increase as income rises, generating overall an N-shaped pattern. Abstract We provide a very simple macroeconomic investigation of the role that structural changes might play in generating inverted U-shaped income-pollution relationships. Differently from previous research which mainly focuses on empirical, static or general equilibrium models, we develop a standard balanced growth path (BGP) analysis. We show that along the BGP equilibrium an inverted U-shaped income-pollution relationship may occur as a response to structural changes, but whether this is the case or not it will crucially depend upon the magnitude of a production externality parameter. Moreover, we show that the negative relationship between income and pollution can only be a transitory phenomenon, and in the long run pollution will increase as income rises, generating overall an N-shaped pattern.Keywords Environmental Kuznets curve · Economic growth · Structural changeWe are grateful to Baran Doda and Andrew John for insightful discussions. We also wish to thank the participants to the WCERE 2014 (Istanbul, Turkey), WAMS 2014 (Melbourne, Australia) and JCU seminar for helpful comments and suggestions. We are indebted to two anonymous referees for their constructive comments helping us to substantially improve our paper.

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Industrial pollution in economic development: the environmental Kuznets curve revisited

Cited by 292 publications

References 30 publications

Unravelling the worldwide pollution haven effect

Unravelling the worldwide pollution haven effect

The Rise and Fall of the Environmental Kuznets Curve

The Environmental Kuznets Curve and the Structural Change Hypothesis

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