Examining 50-year Time Series Data of Kitakyushu City, Japan: An Aggregate Microeconomic Approach for Environmental Kuznets Curve

Minh-Hoang Nguyen

No a25wt, Thesis Commons from Center for Open Science

Abstract: As the economy grows, the living standard is improved, but some externalities are released into the environment threatening the sustainable development of the society. One of the most impactful externalities is air pollution. Recognizing the severe effects of air pollution, the United Nations has mentioned air pollution in three Sustainable Development Goals by 2030 as a significant negative factor that needs preventing. This study aims to examine the relationship between the average firm’s size and air pollution as well as the effect of road infrastructure development in Kitakyushu city, well-known as a green city, using a dataset within the time from 1967 to 2015. The Auto-Regressive Distributed Lag model was employed along with pre-estimation and postestimation tests for model specification, model stability and robustness checks. The results exhibit two different patterns among air pollutants as industrial firms grow. In particular, NO2 and Ox emissions per capita possessed a downward trend relationship or inverted N-shaped curve when plotted with the average industrial firm’s size, whereas SOx and falling dust emissions possessed an opposite trend or U-shaped curve when plotted with the average industrial firm’s size. Also, the current study points out the trilemma among the industrial firm’s growth, road infrastructure development, and air pollution prevention. However, we also found evidence that air pollution can be controlled while keeping industrial growth and road infrastructure development. Theoretically, the current study might be the first study to examine the Environmetal Kuznets Curve from the perspective of aggregate microeconomic behavior (average industrial firm’s size). Practically, current findings point out the complexity and difficulties of pursuing sustainable development and suggest the importance of green growth policies and agenda set up for the city’s sustainable development.

Date: 2019-09-19
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Persistent link: https://EconPapers.repec.org/RePEc:osf:thesis:a25wt

DOI: 10.31219/osf.io/a25wt

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