Growth and the pollution convergence hypothesis: a nonparametric approach

Carlos Ordás Criado (), Simone Valente and Thanasis Stengos

No 09-66, CEPE Working paper series from CEPE Center for Energy Policy and Economics, ETH Zurich

Abstract: The pollution-convergence hypothesis is formalized in a neoclassical growth model with optimal emissions reduction: pollution growth rates are positively correlated with output growth (scale effect) but negatively correlated with emission levels (defensive effect). This dynamic law is empirically tested for two major and regulated air pollutants - nitrogen oxides (NOX) and sulfur oxides (SOX) - with a panel of 25 European countries spanning over years 1980-2005. Traditional parametric models are rejected by the data. However, more flexible regression techniques - semiparametric additive specifications and fully nonparametric regressions with discrete and continuous factors - confirm the existence of the predicted positive and defensive effects. By analyzing the spatial distributions of per capita emissions, we also show that cross-country pollution gaps have decreased over the period for both pollutants and within the Eastern as well as the Western European areas. A Markov modeling approach predicts further cross-country absolute convergence, in particular for SOX. The latter results hold in the presence of spatial non-convergence in per capita income levels within both regions.

Keywords: Air pollution; convergence; economic growth; mixed nonparametric regressions; distribution dynamics (search for similar items in EconPapers)
JEL-codes: C14 C23 Q53 (search for similar items in EconPapers)
Pages: 41 pages
Date: 2009-09
New Economics Papers: this item is included in nep-ene, nep-env, nep-fdg and nep-mic
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Working Paper: Growth and the pollution convergence hypothesis: a nonparametric approach (2009)
Working Paper: Growth and the pollution convergence hypothesis: A nonparametric approach (2009)
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