Empirical Evidence in Ecuador between Economic Growth and Environmental Deterioration

Priscilla Massa-Sánchez, Luis Quintana-Romero, Ronny Correa-Quezada and María de la Cruz del Río-Rama
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Luis Quintana-Romero: Department of Economics, Facultad de Estudios Superiores-FES-Acatlán, Universidad Nacional Autónoma de México, Naucalpan de Juárez 5310, Mexico
María de la Cruz del Río-Rama: Business Management and Marketing Department, Faculty of Business Sciences and Tourism, University of Vigo, 32004 Ourense, Spain
Authors registered in the RePEc Author Service: Luis Quintana Romero

Sustainability, 2020, vol. 12, issue 3, 1-20

Abstract: Currently, obtaining evidence of the correlation between economic growth and environmental deterioration is of great relevance. Due to an increase in economic activity, an increase in CO 2 emissions and its possible effects on the current climate change is very worrying. The studies that analyze this correlation serve as a basis for the awareness of countries and the establishment of policies worldwide to curb such deterioration. The objective of this research is achieved through a panel data model and spatial econometric techniques to address the relationship between economic growth and environmental degradation in Ecuador. A regression model is proposed where the deterioration dependent variable is CO 2 emissions, which is also an independent variable for the provincial gross value added. Poverty and inequality are considered as control variables in order to observe their effects on CO 2 emission. The results are coherent with what is stated by the theory and describe an inverted U-shaped curve. They also show that the generation of pollutant emissions is directly related to the growth of the vehicle fleet and inversely related with the population’s schooling levels. The spatial effects are significant and the spatial impact multipliers indicate that the strongest direct and indirect effect is the one caused by the generation of car emissions per capita. This variable is relevant for the design of public policy aimed at improving environmental quality.

Keywords: economic growth; environmental deterioration; CO 2 emissions; spatial panel models (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:gam:jsusta:v:12:y:2020:i:3:p:853-:d:312402

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