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Pollution reductions in the Czech Republic

Dietrich Earnhart and Lubomir Lizal

Post-Communist Economies, 2008, vol. 20, issue 2, 231-252

Abstract: During the 1990s air pollutant emissions declined dramatically in many of the transition economies in Central and Eastern Europe including the Czech Republic. Various reasons may explain these reductions, such as (1) a decline in production, (2) the exit of older, more polluting firms, along with the entry of new, less polluting firms, (3) more stringent environmental policies etc. To assess these reasons, this study analyses firm-level air pollutant emissions from a panel of Czech firms over the years 1993-98. By controlling for the level of production, this study eliminates the potentially confounding factor of reduced economic activity over this transition period. By tracking a fixed set of firms over time, one part of this study controls for the exit of older firms and the entry of new firms. Based on an assessment of the analytical results and an examination of reasons for the reduction in air pollutant emissions, we conclude that tighter environmental protection policies proved the most important reason behind the dramatic reduction in Czech air pollutant emissions.

Date: 2008
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