National environmental performance: an empirical analysis of policy results and determinants

Daniel C. Esty and Michael E. Porter

Environment and Development Economics, 2005, vol. 10, issue 4, 391-434

Abstract: Efforts to identify the determinants of environmental policy success at the national level have largely been anecdotal and case study based. This article seeks to identify empirically the factors that drive environmental performance as measured by levels of urban particulates and sulfur dioxide and energy use per unit of GDP. Although the data are imperfect and causal linkages cannot be definitively established, the statistical analysis presented suggests that environmental results vary not only with income levels as suggested by the environmental Kuznets Curve literature but also with both the sophistication of a nation's regulatory regime and, perhaps more notably, its broader economic and social context. Thus, at every level of development, countries face policy choices that determine environmental quality in important ways. Strong environmental performance appears to be positively correlated with competitiveness, putting into question the presumed trade-off between economic progress and environmental gains. Although preliminary, these results provide evidence that environmental decision making can be made more data driven and analytically rigorous.

Date: 2005
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