carbon dioxide emissions and governance a nonparametric analysis for the g 20 this paper applies nonparametric estimators to examine countries carbon dioxide co2 emissions and governance relationship by using data for the time period 1996 2010 of the twenty largest economies group of twenty g 20 the dynamics of the considered relationship are analyzed six governance measures are included in our analysis voice and accountability political stability and absence of violence government effectiveness regulatory quality rule of law and control of corruption as have been defined in world governance indicators from the world bank the empirical findings reveal a nonmonotonic relationship between countries co2 emissions and the examined governance measures in addition and with respect to the environmental policy makers a significant difference on the number of governance measures influencing countries carbon dioxide emissions which is subject to countries specific regional and development variations is recorded finally the carbon dioxide emissions governance relationship is highly nonlinear and appears that countries higher governance quality does not always result to lower carbon dioxide emission levels

institutions and the environmental kuznets curve for deforestation a crosscountry analysis for latin america africa and asia abstract the relationship between deforestation and income across 66 countries of latin america africa and asia is examined institutional characteristics as well as macroeconomic policies of each country are hypothesized to impact deforestation results show strong evidence of an environmental kuznets curve ekc relationship between income and deforestation for all three continents institutional structure and macroeconomic policy significantly affect the tropical deforestation process improvements in political institutions and governance significantly reduce deforestation the factors leading to deforestation differ across regions however and there is no one size fits all global policy recommendation for restraining the tropical deforestation process

the role of property rights in determining the environmental quality income relationship article i nfo this paper examines the role of property rights in shaping the relationship between environmental quality and income it develops an analytical framework that integrates the effects of property rights evolution natural resource attributes agent characteristics and production technology on the environment income relationship the substantive strength of this framework lies in its ability to rationalize a wide range of environment income relationships the model shows that the u shaped environment income relationship which is consistent with the environmental kuznets curve ekc hypothesis can arise only under specific model conditions thus the framework provides an additional explanation for non universality of ekc we provide evidence in support of our framework from case studies of various natural resources

political instability corruption and policy formation the case of environmental policy abstract this paper develops a theory of environmental policy formation taking into consideration the degree of corruptibility and political turbulence the predictions that emerge are that the interaction between the two variables is important political instability has a negative effect on the stringency of environmental regulations if the level of corruption is low but a positive effect when the degree of corruption is high corruption reduces the stringency of environmental regulations but the effect disappears as political instability increases the empirical findings are fully consistent with the predictions of the model

natural resources and sub national economic performance does sub national democracy matter abstract the differentiation in the impact of resources on economic growth is often explained by the specifics of institutional factors the aim of this paper is to investigate how sub national political differences influence the effect of natural resources on economic growth using a dataset of russian regions this paper demonstrates that sub national democratization influences the growth effects of resources and considers possible mechanisms for this influence the paper finds that in russia natural resources are only capable of promoting growth in the regions with non democratic political systems that at the same time have an efficient and non corrupt bureaucracy

the environment and welfare implications of trade and tax policy developing countries with comparative advantage in dirty industries face the risk of environmental degradation unless appropriate policies are implemented using applied general equilibrium analysis we examine how trade influences the environment and assess the welfare and environmental implications of alternative pollution abatement policies for indonesia our results indicate that unilateral trade liberalization by indonesia would increase the ratio of emission levels to real output for almost all major pollution categories more importantly when tariff removal is combined with a cost effective tax policy the twin objectives of welfare enhancement and environmental quality improvement appear to be feasible this sheds new and positive light on the role of trade in sustainable development

governance of competitive transmission investment in weak institutional systems despite progress in economic analysis in recent years transmission investment governance still poses policy design challenges in competitive electricity systems the degree of regulatory intervention in allocating investment costs is a central issue scholars tend to agree that centralized solutions are almost inevitable mainly due to free riding and coordination problems in systems with weak institutional endowments and pressures of distributive politics however there is an increased likelihood of regulators acting opportunistically or imposing arbitrary changes to the cost allocation rules which makes centralized solutions less desirable we provide some examples from argentina el salvador and peru and suggest that a two tier governance scheme composed of a self governing forum of transmission stakeholders with regulation as a subsidiary measure may be a more adequate design to restraint undue government interference the expected outcome is twofold a better match with users preferences and a restraint to government opportunism and arbitrariness measuring the robustness of this scheme in minimizing the risks for either too much or too little investment will certainly require further research

industrial pollution in economic development the environmental kuznets curve revisited abstract using new international data this paper tests the environmental kuznets curve ekc hypothesis for industrial water pollution we measure the effect of income growth on three determinants of pollution the share of industry in national output the share of polluting sectors in industrial output and end of pipe eop pollution intensities per unit of output in the polluting sectors we find that the industry share of national output follows a kuznets type trajectory but the other two determinants do not when combined our results imply rejection of the ekc hypothesis for industrial water pollution it rises rapidly through middle income status and remains roughly constant thereafter

the environmental kuznets curve and flow versus stock pollution the neglect of future damages in this paper we offer a possible explanation for the empirical finding that the pollution income relationship pir for flow pollutants is an environmental kuznets curve ekc i e inverted u shaped but that the pir for stock pollutants is monotonically rising we analyse an overlapping generations model with two pollutants the flow pollutant causes immediate damages but the stock pollutant harms the environment only in the future hence a succession of myopic governments lets stock pollution grow with income in contrast the flow pollutant follows an ekc whose downturn might be caused by the neglect of future damages and by ever rising stock pollution without the stock pollutant the pir for the flow pollutant can increase monotonically we also show that the turning point of the ekc for the flow pollutant lies at lower levels of income and of flow pollution if stock pollution is high and harmful this casts doubts on most empirical ekc studies because they assume that the turning point occurs at the same income level in all countries however it is consistent with recent empirical findings that the income level at the turning point of the ekc varies across countries

welfare specifications and optimal control of climate change an application of fund the sensitivity of the optimal control of carbon dioxide emissions to the specification of the social welfare function is systematically explored using the fund model increasing risk aversion emphasises climate change damages relative to emission reduction costs but at the same time increases the discount rate of consumption without international co operation the discount rate effect dominates so that optimal control decreases with increasing risk aversion with international co operation optimal control first increases then decreases with increasing risk aversion since climate change falls heaviest on the poor optimal control increases with increasing inequity aversion full fledged intergenerational welfare functions on the one hand emphasise climate change damages but on the other hand place more weight on current poorer generations in fund the two tendencies almost cancel

do individual preferences explain the environmental kuznets curve abstract some economists maintain the optimistic view that individual preferences of rich people eventually lead to a virtuous circle relationship between rising income and environmental degradation in this article i review some of the models that establish a relationship between individual preferences and environmental quality these models provide a basis for discussion of the key role played by two factors individual preferences and technology they do not however capture the distributive conflicts that occur between different social groups in the process of defining environmental policy neither do they provide a good basis for distinguishing between environmental costs caused by the decisions of particular consumers and those which affect the same consumers this point is related to the various manners in which environmental costs are displaced displacement often occurs within a country for current costs and is even clearer and more relevant when costs are transferred across a great distance or to a remote future in such cases there are few incentives to reduce consumption or alter its composition displacement moreover can become a strategy pursued more or less consciously for maintaining high and rising levels of consumption without dealing with the associated environmental costs

the toxic intensity of industrial production global patterns trends and trade policy this paper exploits a newly developed data set to investigate recent changes in the international distribution of industrial pollution in particular the authors examine three issues 1 the relationship between the toxic intensity of industrial production and the level of economic development 2 the impact of oecd environmental regulation on global changes in toxic intensity and 3 the relationship between trade policy and the toxic intensity of industrial production in ldc s 10 refs

constructing post carbon institutions assessing eu carbon reduction efforts through an institutional risk governance approach this paper examines three different governance approaches the european union eu and member states ms are relying on to reach a low carbon economy by 2050 current governance literature explains the operational methods of the eu s new governance approach to reduce carbon emissions however the literature neglects to account for the perceived risks that inhibit the roll out of new low carbon technology this article through a novel approach uses a grounded theoretical framework to reframe traditional risk literature and provides a connection to governance literature in order to assess the ability of eu governance mechanisms to reduce carbon emissions the empirical research is based on responses from european energy stakeholders who participated in a delphi method discussion and in semi structured interviews these identified three essential requirements for carbon emissions to be reduced to near zero by 2050 1 an integrated european energy network 2 carbon pricing and 3 demand reduction these features correspond to institutionalized responses by the eu and ms the agency for the cooperation of energy regulators acer european union emission trading scheme eu ets and energy efficiency directives and policies integrated into existing ms institutions the theoretical and empirical findings suggest that governance by facilitation energy efficiency fails to induce significant investment and new policy approaches and cannot be relied on to achieve requisite reductions in demand governance by negotiation acer and governance by hierarchy eu ets do reduce risks and may encourage the necessary technological uptake the term risk governance is used to explain the important role governance plays in reducing risks and advancing new technology and thereby lowering carbon emissions in the energy sector

key elements related to the emissions trading for the kyoto protocol the emissions trading first proposed by the us as a concrete idea is a promising policy framework to tackle the global climate change issue it not only has its high cost efficiency flexibility but also has big potential as an instrument which is profitable for both buyers and sellers and must enforce s the compliance with the emission limitations in principle it can be the incentives for economy in transition parties to choose energy saving economic development path and also for the developing country parties to join the regime in the following phases this paper focuses on its pragmatic aspects and clarifies its merits and problems to be solved in order to probe into its possibilities to be installed some related trading scheme on environmental issues are discussed to have implications for the climate change case for climate change trading scheme concrete proposals are suggested for the emissions budget approach and borrowing in addition an idea packaging carbon taxation and emissions trading is proposed for the establishment of the domestic emissions market which guarantees the compliance of the protocol automatically these elements and proposals are expected to be useful information to clarify the points for the international negotiations with some concrete images not general ideas

an optimal path to extinction poverty and resource degradation in the open agrarian economy this paper constructs a model of the open agrarian economy in order to explore the tendency of many such economies to evolve along paths characterised by severe environmental degradation it pays special attention to the importance of commodity prices and the transfer system in determining agricultural activity levels in ecologically delicate systems

empirical asymmetries in foreign direct investment and taxation abstract this paper assesses the sensitivity of the operations of multinational corporations mncs to host country taxation the empirical analysis is based on two different measures of mnc activity by u s majority owned foreign affiliates panel data for aggregate real gross product in manufacturing that originates in a given host country and micro data for a single year regarding the likelihood of a firm locating in a given host country the empirical estimates indicate that investment geared toward export markets rather than the domestic market is particularly sensitive to host country taxation that this sensitivity appears to be greater in developing countries than developed countries and that it is becoming greater over time

confronting the environmental kuznets curve t he environmental kuznets curve posits an inverted u relationship between pollution and economic development kuznets s name was apparently attached to the curve by grossman and krueger 1993 who noted its resemblance to kuznets s inverted u relationship between income inequality and development in the first stage of industrialization pollution in the environmental kuznets curve world grows rapidly because people are more interested in jobs and income than clean air and water communities are too poor to pay for abatement and environmental regulation is correspondingly weak the balance shifts as income rises leading industrial sectors become cleaner people value the environment more highly and regulatory institutions become more effective along the curve pollution levels off in the middle income range and then falls toward pre industrial levels in wealthy societies the environmental kuznets curve model has elicited conflicting reactions from researchers and policymakers applied econometricians have generally accepted the basic tenets of the model and focused on measuring its parameters their regressions typically fitted to cross sectional observations across countries or regions suggest that air and water pollution increase with development until per capita income reaches a range of 5000 to 8000 when income rises beyond that level pollution starts to decline as shown in the conventional ekc line in figure 1 in developing countries some policymakers have interpreted such results as conveying a message about priorities grow first then clean up numerous critics have challenged the conventional environmental kuznets curve both as a representation of what actually happens in the development process and as a policy prescription some pessimistic critics argue that crosssectional evidence for the environmental kuznets curve is nothing more than a

carbon emission performance evaluation and allocation in chinese cities abstract this paper presents a dea approach with multiple abatement factors to evaluate co2 emission performance and allocate co2 emission quotas in chinese cities we first consider the difference of marginal abatement costs among cities and construct the non radial directional distance function with multiple abatement factors the total factor co2 emission performance index and its dynamic change index are then proposed to measure co2 emission performance considering equity and efficiency we develop a composite index by the hybrid method to allocate emissions quota which considers co2 emissions as well as co2 emission performance then we conduct an empirical study using inputs and outputs dataset of 71 chinese cities in 2005 2012 chinese cities have poor energy efficiency and still have high co2 emissions the eastern region outperforms the central region and the western region performs worst whereas the dynamic co2 emission performance of the central region has the largest increase the change of co2 emission performance is driven mainly by technological advances as for the co2 emission allocation the composite index method encourages cities to reduce emissions and enhance emission performance through carbon trading market it also motivates cities with high historical emissions to reduce their emissions by improving technology when they have poor co2 emission performance

economic growth and transboundary pollution in europe an empirical analysis the existing empirical evidence suggests that environmental kuznets curvesonly exist for pollutants with semi local and medium term impacts ansuategi and perrings 2000 have considered the behavioral basis for thecorrelation observed between different spatial incidence of environmentaldegradation and the relation between economic growth and environmentalquality they show that self interested planners following a nash typestrategy tend to address environmental effects sequentially addressingthose with the most immediate costs first and those whose costs aredisplaced in space later this paper tests such behavioral basis in thecontext of sulphur dioxide emissions in europe

neoclassical growth the j curve for abatement and the inverted u curve for pollution abstract this paper reexamines the neoclassical environmental growth model of forster to gain insights into the dynamic relationships among pollution abatement effort and economic development whereas the model has heretofore been used to examine steady state levels of capital consumption and environmental quality it also provides a theoretical basis for recent empirical research on j curves for abatement effort and inverted u curves for pollution

carbon dioxide emissions allocation a review carbon dioxide co2 emissions allocation plays a fundamental role in determining reduction responsibility at economy level or emission permits at firm level past decades have seen the development and applications of various methods for co2 emissions allocation this paper provides a literature review of co2 emissions allocation with emphasis on the evolution of allocation methods used it begins with a summary of the most popular allocation principles and criteria that lay a foundation for the development of allocation methods we then classify the existing allocation methods into four groups namely indicator optimization game theoretic and hybrid approaches the main features and findings of past studies are identified and summarized while the fairness principle prevails in earlier studies the efficiency principle has been found to receive increasing attention recently we also present a comparison of the empirical results based on ten popular indicator methods to show how indicator choice affects the allocation results issues related to selecting appropriate methods in co2 emissions allocation are finally discussed further research may be carried out to strike a balance between fairness and efficiency so that the allocation results become more widely acceptable and economically feasible

economic growth pollution and renewable resources abstract this paper first analyzes a model of economic growth with stock pollution allowing smooth substitution between emissions and reproducible capital when emissions are optimally controlled the steady state consumption is lower than without pollution control but the optimal steady state equilibrium may not exist if the marginal productivity of capital is bounded the steady state is shown to be a local saddle point independent of the rate of discount if pollution is not controlled a competitive economy moves along a stable growth path toward a too heavily polluted steady state next a growth model in which pollution affects the growth of renewable resources is presented the conditions for the existence and saddle point property of the steady state are given and the consequences of nonoptimal externality taxes are discussed when renewable resources are included higher than optimal pollution may decrease steady state consumption contrary to the case where renewable resources are ignored

the effect of distance on willingness to pay values a case study of wetlands and salmon in california most contingent valuation studies in the literature utilized a pre determined geographic market area for their sample frame in other words they did not include variables that would measure the extent of the geographic areas over which to aggregate willingness to pay these studies implicitly assumed that the effects of geographic distance were moot an assumption that could have led to an understatement of the aggregate benefit values computed in these studies the overall goal of this study was to determine if distance affects willingness to pay for public goods with large non use values the data used came from a contingent valuation study regarding the san joaquin valley ca respondents were asked about their willingness to pay wtp for three proposed programs designed to reduce various environmental problems in the valley a logit model was used to examine the effects of geographic distance on respondents willingness to pay for each of the three programs results indicate that distance affected wtp for two of the three programs wetlands habitat and wildlife and the wildlife contamination control programs we calculate the underestimate in benefits if the geographic extent of the public good market is arbitrarily limited to one political jurisdiction

economic growth and emissions reconsidering the empirical basis of environmental kuznets curves abstract recent empirical research indicates that certain types of emissions follow an inverted u or environmental kuznets curve ekc as income grows this regularity has been interpreted as a possible de linking of economic growth and patterns of certain pollutants for developed economies in this paper the empirical basis of this result is investigated by considering some statistical particularities of the various ekc studies performed it is argued that the inverted u relationship between income and emissions estimated from panel data need not hold for specific individual countries over time based on insights from intensity of use analysis in resource economics an alternative growth model is specified and estimated for three types of emissions co2 nox and so2 in four countries netherlands uk usa and western germany it is found that the time patterns of these emissions correlate positively with economic growth and that emission reductions may have been achieved as a result of structural and technological changes in the economy sustainable growth is defined as the rate of economic growth that does not lead to growth in emissions its rate is calculated for each type of emission and country based on estimated parameter values the resulting indicators reflect a balance between the positive influence of growth and negative influence of structural change and technological progress on emission levels

new directions in emissions trading the potential contribution of new institutional economics abstract once an arcane topic even among environmental economists emissions trading systems have substantially increased during this past decade in the usa moreover the implementation of these systems has necessitated increased involvement of professionals in many fields besides economics this paper reviews the practical experience of the six major types of emissions trading systems focusing on credit market development participation and results including transaction costs five more recent applications of emissions trading also are considered as well as the possibility of inter pollutant trading while inter pollutant trading has been successfully used for chlorofluorocarbons cfcs the applicability of this experience is probably very limited additionally it would be highly premature to attempt an evaluation of these newer emissions trading systems some of which have yet to be even partially implemented in order to improve these latter and future programs the paper considers the potential contribution of the new institutional economics nie to emissions trading the nie is used to develop theoretical insights and a series of predictions about the performance of a range of emissions trading systems

functional form and aggregate energy demand elasticities a nonparametric panel approach for 17 oecd countries this paper studies whether the commonly used linear parametric model for estimating aggregate energy demand is the correct functional specification for the data generating process parametric and n

transboundary externalities in the environmental transition hypothesis the environmental kuznets curve ekc is a hypothesis which implies that it is possible to grow out of environmental degradation most theoretical models of the ekc relation have not accounted for transboundary and intergenerational externalities nor have empirical studies provided evidence that validates an inverted u shaped relation between environmental degradation and economic growth for pollution problems where the effects are far displaced or are long delayed

property rights protest and the siting of hazardous waste facilities ture since that time no major hwf has been sited anywhere in the united states the epa had anticipated that local opposition would make finding these sites an exceptionally difficult task their pessimism was well founded and if anything understated according to the hazardous waste counsultant s latest state by state review the outlook for siting hwfs in the future is even more bleak than in the past due in large part to what they term a worsening of the emotional atmosphere surrounding siting efforts this failure to site any new hwf has come about in spite of assurances by government and company officials that new facilities built according to the present standards would pose negligible risks to the local residents attempts have been made to break the deadlock by instituting extensive public participation procedures establishing state siting boards with the power to overrule local decision makers and requiring facility owners to compensate local governments for safety services the latter provided in this paper we argue that the ambiguous nature of the present property rights governing the siting of hwfs is an important cause of the stalemate we offer a new approach to siting which recognizes the de facto property rights assumed by local communities we propose a political market via a referendum

revealing the political decision toward chinese carbon abatement based on equity and efficiency criteria abstract china s economic reform over the past 30 years has allowed the free market to drive economic development however government still plays a key role in the energy sector by allocating energy conservation and emissions abatement how does the government make an equity decision as a tradeoff to market efficiency this is an unanswered question the purpose of this paper is to illustrate the government s preference toward equity and efficiency using the provincial level co 2 intensity allocation data we investigate the political decision that the government made based on the equity and efficiency criteria we find that the equity index plays a more important role than the efficiency index in determining the co 2 intensity target in addition political factors such as social stability are found to be important factors

reducing conflicts between climate policy and energy policy in the us the important role of the states the absence of us national action on global climate change policy has prompted initiatives by the us congress cities states and regions toward what is likely to become a long term collaborative effort to harmonize national energy and climate policies this upward evolution in the face of a reluctant administration is historically consistent with the development of national legislation on other environmental and social issues in the us at the heart of this movement is the need to resolve conflicts between high intensity use of low cost fossil energy supplies and the dominating impact of carbon dioxide emissions on global climate change us states are among the largest carbon dioxide emitters in the world and play a critical role in supplying and transforming energy as well as consuming it for economic advantage state governments are also likely to have to shoulder some of the cost of potentially extensive climate damages and bear the brunt of the cost of implementing future federal mandates as a result many are taking proactive stances on the development of climate mitigation policy to prepare for accelerate and or guide national policy as us states show leadership on addressing greenhouse gas emissions they also play an important role in forging policies and measures that reduce economic conflict between energy and climate goals a number have launched or completed greenhouse gas mitigation plans and other major policies in the past few years that address these conflicts through 1 finding ways to reduce mitigation costs including the use of incentive based policy instruments 2 promoting an open and democratic policy process that includes major stakeholders 3 promoting equity across socioeconomic groups regions and generations and 4 promoting interregional cooperation the results are promising and suggest that the state arena for climate and energy policy is evolving quickly and constructively toward alternatives that reduce conflict regional efforts are also unfolding along with greater congressional attention to the lessons learned and commitments made by sub federal actions in the next few years many national energy and climate conflicts are likely to be tested and addressed by states among these pennsylvania is likely to be an important player due to its high profile of energy production and potential for leadership

environmental degradation in developing countries households and the reverse environmental kuznets curve abstract we propose an alternative explanation for the inverted u shape relationship between income and environmental degradation in developing countries production and consumption patterns of rural households are the main cause of environmental damage with a conventional household model we demonstrate that the so called environmental kuznets curve may arise when the restrictive assumption of a set of perfect markets for factors and commodities is relaxed depending on the criterion or indicator that is used to represent environmental pressure however we demonstrate that the reverse may also hold this finding highlights the importance of selecting the appropriate dependent variable in regression analyses

reforming the power sector in transition do institutions matter this paper aims to investigate the often poorly explored link between power sector reforms and wider institutional reforms in the economy across different groups of transition countries we use panel data econometrics based on bias corrected dynamic fixed effect analysis lsdvc to assess the impact of reforms on macroeconomic and power sector outcomes the results indicate that power sector reform is highly inter dependent with wider reforms in other sectors of the economy the findings indicate that failure to harmonize inter sector reforms leads to power sector reform measures being ineffective we conclude that the success of power sector reforms in developing countries largely depend on the extent to which they synchronize inter sector reforms in the economy

the determinants of atmospheric so2 concentrations reconsidering the environmental kuznets curve this analysis explores the effects of income and the spatial intensity of economic activity on the atmospheric concentration of sulfur dioxide the results indicate that there is a u shaped relation between income and atmospheric concentration of so2 and an inverted u shaped relation between the spatial intensity of economic activity and so2 concentrations these results suggest that the spatial intensity of economic activity rather than income provides the impetus for policies and technologies that reduce so2 emissions based on this result the atmospheric concentration of so2 in developing nations may decline faster than indicated by previous analyses the potential for this decline depends on the rate at which income grows relative to population the trade off between the effects of income gains and the spatial intensity of economic activity on the atmospheric concentration of so2 is consistent with the notion that some environmental problems can be ameliorated by slowing population growth and increasing income levels

coordination failures and government policy evidence from emerging countries rodrik jie 1996 argues for coordinated government policy when emerging countries are stuck in a low wage equilibrium because of a coordination failure because the return to intermediate output is markedly below that realised when a minimum threshold number of varieties must produced in concert the expectation of too few varieties is sufficient to discourage entry and keep a high tech sector from succeeding here we search for evidence consist with such threshold models on cross country data first production data is used to ask i whether evidence of coordination failures among intermediate good producers is associated with a low wage equilibrium and ii whether government policy can succeed in moving an emerging country from a low to high wage equilibrium second financial data is used to ask whether there is evidence that government coordination can replace missing private markets in emerging economies and whether a moderate degree of financial repression can help rather than hinder growth

political regimes and economic growth arguments that relate regimes to growth focus on property rights pressures for immediate consumption and the autonomy of dictators while everyone seems to agree that secure property rights foster growth it is controversial whether democracies or dictatorships better secure these rights the main mechanism by which democracy is thought to hinder growth is pressure for immediate consumption which reduces investment only states that are institutionally insulated from such pressures can resist them and democratic states are not the main argument against dictatorships is that authoritarian rulers have no interest in maximizing total output these views are summarized in turn

do corporate global environmental standards create or destroy market value arguments can be made on both sides of the question of whether a stringent global corporate environmental standard represents a competitive asset or liability for multinational enterprises mnes investing in emerging and developing markets analyzing the global environmental standards of a sample of u s based mnes in relation to their stock market performance we find that firms adopting a single stringent global environmental standard have much higher market values as measured by tobin sq than firms defaulting to less stringent or poorly enforced host country standards thus developing countries that use lax environmental regulations to attract foreign direct investment may end up attracting poorer quality and perhaps less competitive firms our results also suggest that externalities are incorporated to a significant extent in firm valuation we discuss plausible reasons for this observation

on environmental impacts of market based reforms evidence from the european and central asian transition economies global warming and other adverse climate change impacts induced by anthropogenic carbon dioxide emissions are a major public policy concern around the world including transitional economies this paper therefore examines the impacts of market based economic reforms on per capita co2 emissions in the european and central asian transition economies where environmental degradation was pervasive prior to these reforms a dynamic panel data model is employed for this purpose for 28 countries covering 22 years from 1990 to 2012 our overall results suggest that economic openness may not necessarily result in sustainable development although reforms in competition policy and corporate governance were the significant drivers of emissions reductions in the region hence advances in competition policy and governance reforms are desirable given the available scope to extend these reforms the structural shift to and emergence of light industries also contributed to declining co2 emissions in the transition process the direct impact of the kyoto protocol in reducing emissions is debatable which also raises doubts on the effectiveness of the paris agreements

political institutions and pollution control this paper models the selection of environmental policies under authoritarian and democratic regimes and tests the hypothesis that political institutions systematically affect the enactment of environmental regulations the results support the contention that political institutional arrangements rather than resource endowments largely determine policies concerning environmental regulation copyright 1992 by mit press

are there increasing returns to pollution abatement empirical analytics of the environmental kuznets curve in pesticides abstract according to the environmental kuznets curve ekc hypothesis economic growth and the reduction of environmental degradation are compatible goals an inverted u shaped relationship between economic performance and environmental pollution suggests that empirically an economy is associated with smaller levels of pollution after some threshold income point one potential explanation for the empirical evidence of an ekc is increasing returns to pollution abatement where the abatement efficiency rises with an increase in the scale of abatement doubling the clean up efforts more than doubles the abatement of pollution as this efficiency gain makes abatement less expensive pollution might fall as more abatement is undertaken this study tests the hypothesis that there are increasing returns to abating pollution empirical evidence on environmental risks in the us agricultural sector since 1970 support the existence of increasing returns in addition i estimate the productivity of pollution abatement using refined empirical productivity measurement methods and explicitly control the level of technology the results show the importance of including an environmental productivity variable in the ekc framework

are there limits to growth a simple theoretical model of pollution is developed that generates an inverted u shape relationship between per capita income and environmental quality this model is then used to study long run growth the same inverted u shape is shown to appear in time series and the prospects for sustained growth are shown to hinge on whether increasingly strict environmental regulation is compatible with a constant rate of return on capital implementation is also studied tax and voucher schemes are shown to have an advantage over direct regulation because they provide the correct incentives for capital accumulation copyright 1998 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

international equity and differentiation in global warming policy ne of the major obstacles to reaching a comprehensive agreement on global warming is the setting of greenhouse gas emission reduction targets for individual countries long standing tensions between industrialized and developing countries have raised the issue of equity in burden sharing moreover individual industrialized nations have pleaded special circumstances and have sought differentiation in their obligations this paper analyzes alternative rules for distributing tradable carbon dioxide emissions permits a non linear programming model which distinguishes between allocation based and outcome based rules is used to analyze the relative welfare outcomes the model is applied to the world body of nations and yields several important policy implications

determinants of commercial bank interest margins and profitability using bank level data for 80 countries in the years 1988 9s this article shows that differences in interest margins and bank profitability reflect a variety of determinants bank characteristics macroeconomic conditions explicit and implicit bank taxation deposit insurance regulation overall financial structure and underlying legal and institutional indicators a larger ratio of bank assets to gross domestic product and a lower market concentration ratio lead to lower margins and profits controlling for differences in bank activity leverage and the macroeconomic environment foreign banks have higher margins and profits than domestic banks in developing countries while the opposite holds in industrial countries also there is evidence that the corporate tax burden is fully passed onto bank customers while higher reserve requirements are not especially in developing countries

economic growth and greenhouse gas emissions abstract recent empirical research has examined the relationship between certain indicators of environmental degradation and income concluding that in some cases an inverted u shaped relationship which has been called an environmental kuznets curve ekc exists between these variables unfortunately this inverted u shaped relationship does not hold for greenhouse gas emissions one explanation of the absence of ekc like behavior in greenhouse gas emissions is that greenhouse gases are special pollutants that create global not local disutility but the international nature of global warming is not the only reason that prevents de linking greenhouse gas emissions from economic growth the intergenerational nature of the negative impact of greenhouse gas emissions may have also been an important factor preventing the implementation of greenhouse gas abatement measures in the past in this paper we explore the effect that the presence of intergenerational spillovers has on the emissions income relationship we use a numerically calibrated overlapping generations model of climate economy interactions we conclude that 1 the intertemporal responsibility of the regulatory agency 2 the institutional capacity to make intergenerational transfers and 3 the presence of intergenerationally lagged impact of emissions constitute important determinants of the relationship between economic growth and greenhouse gas emissions

determinants of pollution abatement in developing countries evidence from south and southeast asia abstract developing countries pa ticularly those in asia are fast adopting industrial pollution control standards similar to those in developed countries formal regulation has been greatly hampered however by the absence of clear and legally binding regulations limited institutional capacity lack of appropriate equipment and trained personnel and inadequate information on emissions one would predict highly pollution intensive production under such conditions our research however has uncovered strongly contradictory evidence despite weak or nonexistent formal regulation there are many clean plants in the developing countries of south and southeast asia of course there are also many plants which are among the world s most serious polluters what explains such extreme interplant variation this paper reviews evidence drawn from three empirical studies of plant level abatement practices conducted 1992 1994 the analyses test the importance of plant characteristics economic considerations and external pressure in determining environmental performance the results consistently show that pollution intensity is negatively associated with scale productive efficiency and the use of new process technology it is strongly and positively associated with public ownership but foreign ownership has no significant effect once other plant characteristics are taken into account among external sources of pressure community action or informal regulation emerges as a clear source of interplant differences in all three studies the results suggest that local income and education are powerful predictors of the effectiveness of informal regulation they also show that existing formal regulation has measurably beneficial effects even when it is quite weakly developed

coordination failures and government policy a model with applications to east asia and eastern europe abstract poor countries must specialize in standardized labor intensive commodities middle income countries may have a richer menu of options if their labor force is reasonably well educated and skilled the multiplicity of equilibria is due to a coordination problem inherent in activities that require specialized inputs if no intermediate inputs are presently produced there may be little incentive for any single firm to do so on its own the economy may get stuck in a low wage low tech equilibrium an investment subsidy or a minimum wage policy can enhance welfare by moving the economy to a superior equilibrium

dirty industries patterns of change in industrial countries this article concerns itself with the environmental role of heavily polluting industries since 1970 analysing its development in 11 basic industries as well as electricity production and road transport in 32 industrial countries it argues for a green industrial policy demonstrating that other mitigations of environmental pressure in industrial countries end of pipe treatment relocation to the third world structural change in the industrial sector and even environmentally oriented modernization have so far been unable to solve the problems of dirty industries although some approaches have shown some promise

the impact of environmental management on firm performance environmental management has the potential to play a pivotal role in the financial performance of the firm many individuals suggest that profitability is hurt by the higher production costs of environmental management initiatives while others cite anecdotal evidence of increased profitability a theoretical model is proposed that links strong environmental management to improved perceived future financial performance as measured by stock market performance the linkage to firm performance is tested empirically using financial event methodology and archival data of firm level environmental and financial performance significant positive returns were measured for strong environmental management as indicated by environmental performance awards and significant negative returns were measured for weak environmental management as indicated by environmental crises the implicit financial market valuation of these events also was estimated cross sectional analysis of the environmental award events revealed differences for first time awards and between industries first time award announcements were associated with greater increases in market valuation although smaller increases were observed for firms in environmentally dirty industries possibly indicative of market skepticism this linkage between environmental management and financial performance can be used by both researchers and practitioners as one measure of the benefits experienced by industry leaders and as one criterion against which to measure investment alternatives

institutional causes macroeconomic symptoms volatility crises and growth countries that have pursued distortionary macroeconomic policies including high inflation large budget deficits and misaligned exchange rates appear to have suffered more macroeconomic volatility and also grown more slowly during the postwar period does this reflect the causal effect of these macroeconomic policies on economic outcomes one reason to suspect that the answer may be no is that countries pursuing poor macroeconomic policies also have weak institutions including political institutions that do not constrain politicians and political elites ineffective enforcement of property rights for investors widespread corruption and a high degree of political instability this paper documents that countries that inherited more extractive institutions from their colonial past were more likely to experience high volatility and economic crises during the postwar period more specifically societies where european colonists faced high mortality rates more than 100 years ago are much more volatile and prone to crises based on our previous work we interpret this relationship as due to the causal effect of institutions on economic outcomes europeans did not settle and were more likely to set up extractive institutions in areas where they faced high mortality once we control for the effect of institutions macroeconomic policies appear to have only a minor impact on volatility and crises this suggests that distortionary macroeconomic policies are more likely to be symptoms of underlying institutional problems rather than the main causes of economic

portfolio mix and large bank profitability in the usa the us banking system has just emerged from a troublesome period with many institutions struggling for survival we examine large commercial banks during the latter part of the 1980s to determine what factors affected bank profitability using both cross section and pooled time series cross section regressions our conclusions are that large banks experienced poor performance because of a declining quality of the loan portfolio real estate loans generally have a negative effect on large bank profitability although not at high levels of significance construction and land development loans the exception have a strong positive effect

on the profitability of commercial banks the sri lankan case abstractthis study determines the factors affecting the profitability of licensed commercial banks lcbs in sri lanka including the effect of the prolonged conflict which ended in 2009 using an error correction model together with data for the period 2006 2014 of 10 major lcbs the results reveal that in the short run capital and liquidity have a positive effect on bank profitability and default loans interest margin im operating cost and interest rates irs have a negative effect in the long run bank profitability is significantly impacted by default loans im real gdp inflation irs capital operating cost and conflict the ending of the prolonged conflict has significantly contributed to improved bank performance

economic growth inequality democratization and the environment we augment the stokey 1998 model by allowing agents to differ with respect to environ mental quality and income in order to analyze the impact of income and environmental inequality and of democratization on aggregate pollution we find that the impact of a more equal income distribution depends on the degree of democracy in a complete democracy a more equal income distribution generates ceteris paribus less pollution which is consistent with indirect empirical evidence whereas the opposite is the case if democratic rights are highly restricted furthermore a democratization is argued to typically lower both the income and the environmental quality of the median voter in this case if in utility terms the fall in environmental quality is worse than the fall in consumption the median voter decides to tighten environmental legislation so that aggregate pollution decreases

corruption income and the environment an empirical analysis abstract in response to the recent growth of a largely theoretical body of literature analysing the linkages between corruption and pollution this paper subjects the corruption pollution relationship to a detailed empirical examination a distinction is drawn between the direct impact of corruption on pollution and the indirect impact which operates through corruption s impact on per capita income and the resultant impact of income on pollution using data for 94 countries covering the period 1987 2000 both direct and indirect impacts of corruption on air pollution emissions are estimated for both sulfur dioxide and carbon dioxide corruption is estimated to have a positive direct impact on per capita emissions indirect effects are found to be negative and larger in absolute value than direct effects for the majority of the sample income range as a result the total effect of corruption on emissions is negative for all but the highest income countries in the sample

trade and environment an empirical analysis of the technology effect in the steel industry abstract the objective of this paper is to study the impact of free trade on global environmental quality by focusing on the technology effect that is the relationship between trade openness and the adoption diffusion of clean technologies the paper attempts to empirically verify the existence of the technology effect by looking at the relationship between trade policy regime or openness and the speed of clean technology diffusion in the steel industry focusing on a cleaner steel technology the electric arc furnace eaf in 30 steel producing countries over 25 years the results show that eaf technology is diffused faster in countries that have more open trade policy regimes thereby supporting the existence of the technology effect for the industry considered

the allocation of co2 emissions as a claims problem abstract in the context of multilateral negotiations on climate change this paper proposes to use the claims approach as a reasonable and practicable alternative in order to allocate the admissible co2 emissions per region the proposed methodology entails analyze the application of a broad group of theoretical solutions through the establishment of equity and stability criteria to this regard the empirical analyzing combines several co2 world endowments from meinshausen et al 2009 together with claims forecasts associated with the rcp representative concentration pathways scenarios the results obtained indicate that the constrained equal awards and minimal solutions are clearly equity sensitive given that the co2 emission reduction imposed by the constrained equal awards solution on asia and the oecd are very important and considering the better balance between equity and proportionality associated with the min solution it could be that this latter solution would be the most practicable and acceptable

valuing energy policy attributes for environmental management choice experiment evidence from a research institution abstract many governments firms institutions and individuals have become increasingly cognizant of their impact on the environment most notably with respect to global climate change coupled with the possibility of future regulations aimed at curbing greenhouse gas emissions firms and institutions have begun to critically evaluate their own carbon footprint this paper examines the preferences of stakeholders within a large academic institution for attributes of alternative greenhouse gas ghg reduction strategies the attributes considered by constituents include the fuel portfolio mix effort for conserving energy use carbon emissions reduction timeframe for emissions reduction to be achieved and cost we use a choice experiment technique that enables the examination of greenhouse gas reduction program attribute preferences across three constituent groups the results show that each of the constituent groups have a positive wtp for carbon emissions reductions and prefer investments in reductions in the shorter rather than longer term the results also suggest differences between the constituent groups in their wtp for types of fuels in the fuel portfolio finally we use the results to examine the welfare implications of different combinations of the policy attributes that coincide with alternative ghg program strategies

equity efficiency trade off in china s energy capping policy abstract as a part of the transition to a sustainable economy china has set a cap on primary energy consumption for the first time of 5 0 billion tonnes of standard coal equivalent by 2020 however there is a debate on the cap feasibility and failure to adequately address the underlying equity efficiency trade off which hampers achievement this paper identifies some key challenges ahead including the coal dominant energy mix declining financial support inconsistent central local goals rising costs of energy saving measures and quality of energy statistical data by quantifying the preference of each providence toward equity based or efficiency based allocation schemes the great disparity among provinces is revealed and the equity efficiency trade off relationship is confirmed developing regions primarily located in central and western areas tend to favor equity based disaggregating schemes contrarily developed coastal provinces strongly favor efficiency based schemes the present national disaggregation schemes are mainly based on historical energy consumption but disregard the provincial development gap and efficiency factors we conclude that this ambitious goal is likely within reach but increased efforts and flexible instruments are needed

deforestation and the environmental kuznets curve an institutional perspective institutions for secure property rights and better environmental policies for moving the system towards a sustainable growth path can reduce the height of an environmental kuznets curve ekc relationship between income and deforestation this study examines the impact of these specific institutional factors on the ekc relationship for deforestation across latin american african and asian countries the factors related to agricultural production population economy and governmental policies of each country are hypothesised to affect deforestation results of the latin american countries show significant evidence of an ekc relationship for deforestation and also relevance of the institutional factors to reduce the rate of deforestation improvements in institutions for secure property rights and better environmental policies can thus significantly reduce the rate of deforestation without hindering the level of economic growth evidence also suggests that the effect of agricultural production on deforestation could be halted by strengthening institutional factors there was found to be complementarity between the institutional factors and forest sector polices and an additive effect between the institutional factors and forest products export promotion policies which could also eventually reduce the rate of deforestation

sustainable economic development and the environment theory and evidence the relationship between growth and pollution is studied through a vintage capital model where new technologies are more environmentally friendly we find that once the optimal scrapping age of technologies is reached an economy may achieve two possible cases of sustainable development one in which pollution falls and another in which it stabilizes or a catastrophic outcome where environmental quality reaches its lower bound the outcome will depend on countries investment path and their propensity to innovate in environmentally clean technologies both of which are likely to differ across economies empirical results using long time series for a number of developed and developing countries indeed confirm heterogenous experiences in the pollution output relationship

trade and pollution linkages piecemeal reform and optimal intervention we demonstrate how coordinated trade and environmental policy can achieve ef ficiency and pollution mitigation gains superior to those obtained without such coordination we show how trade and environment linkages give rise to complex second best policy issues and derive optimal interventions and sufficient conditions for welfare improving piecemeal trade and environmental policy reforms in a small economy changing trade and environ ment distortions in proportion to their optimal levels increases welfare we decompose the economic and environment effects of policies targeted at trade and pollution in both con sumption and production we also decompose production responses into output adjustments and changes in pollution intensities

concentration and other determinants of bank profitability in europe north america and australia abstract this study reviews the performance of banks in twelve countries or territories in europe north america and australia and examines the internal and external determination of profitability to circumvent some of the difficulties in making comparisons between banks in different countries the concept of value added is introduced results parallel those in domestic u s studies and provide some support for the edwards heggestad mingo hypothesis of risk avoidance by banks with a high degree of market power

inequality growth and environmental quality trade offs in a model with human capital accumulation this paper develops a simple endogenous growth model where pollution exposure and vulnerability are unequally spread across the population and growth and distribution are endogenous in this set up we investigate whether trade offs between growth distributional and environmental concerns may emerge we show that a tighter environmental policy reduces income inequality and can improve both growth and total welfare immediate welfare losses though do occur and are larger for countries that start at low levels of environmental quality e g developing countries inegalite croissance et qualite de l environnement arbitrages dans un modele d accumulation de capital humain nous developpons un modele de croissance endogene ou l exposition et la vulnerabilite a la pollution sont inegalement reparties dans la population et ou la croissance et la distribution des revenus sont determinees de facon endogene dans ce cadre d analyse nous cherchons s il existe des arbitrages entre la croissance les inegalites et l environnement notamment dans les pays en developpement nous montrons qu une politique environnementale plus stricte conduit a la fois a une reduction des inegalit es et a une augmentation de la croissance et du bien etre dans un premier temps cependant ce changement de politique conduit a une reduction du bien etre qui est relativement plus importante pour les pays dont la qualite environmentale est initiallement faible e g les pays en developpement

income inequality and pollution a reassessment of the environmental kuznets curve abstract improvements in some measures of air and water quality can accompany rising per capita income as illustrated by the so called environmental kuznets curve for pollution variables which show such a relationship we hypothesize that a more equitable distribution of power contributes to these outcomes by enhancing the influence on policy of those who bear the costs of pollution relative to the influence of those who benefit from pollution generating activities an empirical analysis of international variations in seven indicators of air and water quality supports this hypothesis literacy political rights and civil liberties are found to have particularly strong effects on environmental quality in low income countries

effects of political institutions on air quality we empirically test existing theories on the provision of public goods in particular air quality using data on sulfur dioxide so2 concentrations from the global environment monitoring projects for 107 cities in 42 countries from 1971 to 1996 the results are as follows first we provide additional support for the claim that the degree of democracy has an independent positive effect on air quality second we find that among democracies presidential systems are more conducive to air quality than parliamentary ones third in testing competing claims about the effect of interest groups on public goods provision in democracies we establish that labor union strength contributes to lower environmental quality whereas the strength of green parties has the opposite effect

corruption pollution and the kuznets environment curve abstract this paper examines the implications of corruption and rent seeking behavior by the government for the relationship between pollution and growth cases of both cooperative and non cooperative interaction between the government and the private firm are studied it is shown that corruption is not likely to preclude the existence of an inverted u shaped kuznets environmental curve under both these cases however for any level of per capita income the pollution levels corresponding to corrupt behavior are always above the socially optimal level further the turning point of the kuznets curve takes place at income and pollution levels above those corresponding to the social optimum

an overlapping generations model of growth and the environment this article analyzes the potential conflict between economic growth and the maintenance of environmental quality in an overlapping generations model short lived individuals make decisions which have long lasting effects on both factor productivity and the environment the model provides a theoretical explanation of observed correlations between environmental quality and income whereby economic growth is associated first with declines then improvements in environmental quality it suggests circumstances in which multiple pareto ranked steady state equilibria may arise and in which sustained growth of both capital and environmental quality may occur overmaintenance of the environment analogous to dynamically inefficient overaccumulation of capital may emerge copyright 1994 by royal economic society

reducing conflict in global warming policy the potential of equity as a unifying principle abstract international agreement on global warming mitigation is likely to prove difficult efficiency based policies will result in disparate costs and benefits among nations and thus hinder cooperation this paper suggests that consideration be given to an equitable sharing of the economic impacts of global warming policy acknowledging that there is no universally held concept of equity the policy implications of several alternatives are explored because there is considerable variation in these implications it will be important for decision makers to clarify their preferred concepts of equity during the course of their negotiations on policies to address global warming

international investment location decisions abstract in international location tournaments governments compete for foreign investment with tax and other short run incentives such tournaments can be won if agglomeration economies are sufficiently powerful to overcome investors desire to spread investments as a hedge against risk we focus on manufacturing investments by u s multinationals in the 1980s our econometric results suggest that agglomeration economies are indeed the dominant influence on investor calculations paradoxically short run incentives have limited apparent impact on location choice we conclude that high cost tournament play is unnecessary for countries with good infrastructure development specialized input suppliers and an expanding domestic market

is there an environmental kuznets curve for sulfur abstract most existing estimates of the environmental kuznets curve ekc for sulfur which use samples of mainly high income countries indicate a maximum emissions turning point at middle to lower high income levels of gdp per capita we use a larger and more globally representative sample than previous sulfur ekc studies we find that sulfur emissions per capita are a monotonic function of income per capita when we use a global sample and an inverted u shape function of income when we use a sample of high income countries a model estimated in first differences results in a monotonic ekc when estimated with both high income and global samples reductions in emissions are time related rather than income related

financial markets in development and the development of financial markets what is the relationship between markets and development it is argued that markets promote growth and that growth in turn encourages the formation of markets two models with endogenous market formation are presented to analyze this issue the first examines the role that financial markets banks and stock markets play in allocating funds to the highest valued use in the economic system it is shown that intermediation will arise under weak conditions the second focuses on the role that markets play in supporting specialization in economic activity the consequences of perfect competition in market formation are highlighted

pollution control under uncertainty and sustainability concern we analyze the implications of environmental policy on pollution in a stochastic framework with finite horizon and sustainability concern the social planner seeks to minimize the social environmental and economic costs associated with pollution we allow for the planner to attach different relative weights to the discounted and end of planning horizon costs in order to assess how sustainability concern might affect the optimal level of policy intervention we show that the optimal environmental policy increases with the degree of sustainability concern reducing thus the amount of pollution the society is forced to bear a calibration based on world textit co 2 data supports our conclusions further highlighting the importance of higher degrees of sustainability concern to achieve greener long run outcomes it also allows us to show that under a realistic model s parametrization the optimal environmental policy tends to rise with higher degrees of uncertainty in a precautionary manner

financial development and economic growth views and agenda this critique argues that the preponderance of theoretical reasoning and empirical evidence suggests a positive first order relationship between financial development and economic growth the body of work would push even most skeptics toward the belief that the development of financial markets and institutions is a critical and inextricable part of the growth process and away from the view that the financial system is an inconsequential sideshow responding passively to economic growth many gaps remain however and the paper highlights areas in acute need of additional research

short term decisions under long term uncertainty the behaviour of future policy makers substantially influences future greenhouse gas emissions uncertainty about the motives of future policy makers may thus strongly influence the climate policy strategies of current policy makers analytical and numerical analyses in this paper confirm this hypothesis if current policy makers want to constrain emissions accumulated over a prolonged period of time and if future policy makers tend with a certain chance to a less ambitious climate policy then current policy makers should intensify their efforts to reduce emissions and the cost of emission reduction in this setting if current policy makers want to meet a cumulative emission contraint in expectation then the preferred policy trajectory does not qualitatively deviate from one suggested by a standard cost effective trajectory if however the constraint is to be met with a certain probability then the importance of early action is enhanced relative to that of postponed action costs substantially increase if current policy makers want to set long term goals without the full cooperation of future policy makers