Growth and pollution convergence: Theory and evidence

C. Ordás Criado, S. Valente, T. Stengos

Research output: Contribution to journalArticlepeer-review

68 Citations (Scopus)

Abstract

Stabilizing pollution levels in the long run is a pre-requisite for sustainable growth. We develop a neoclassical growth model with endogenous emission reduction predicting that, along optimal sustainable paths, pollution growth rates are (i) positively related to output growth (scale effect) and (ii) negatively related to emission levels (defensive effect). This dynamic law reduces to a convergence equation that is empirically tested for two major and regulated air pollutants – sulfur oxides and nitrogen oxides – with a panel of 25 European countries spanning the years 1980–2005. Traditional parametric models are rejected by the data. More flexible regression techniques confirm the existence of both the scale and the defensive effect, supporting the model predictions.
Original languageEnglish
Pages (from-to)199-214
Number of pages16
JournalJournal of Environmental Economics and Management
Volume62
Issue number2
Early online date21 Apr 2011
DOIs
Publication statusPublished - Sep 2011

Keywords

  • Air pollution
  • Convergence
  • Economic growth
  • Nonparametric regressions

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