Richer and cleaner—At others’ expense?

In rich economies emissions of many pollutants tend to grow at a slower rate than GDP. This could be a result of shifting comparative advantages. If so, net imports of dirty products to these economies will increase and rather than reduced, emissions will be relocated to other countries. In this paper we investigate if decoupling in a rich, open economy coincides with such pollution leakages abroad. Based on historical observations and model projections, we find little evidence to support this hypothesis. Historically, decoupling coincides with falling pollution leakages. Projections over a period of decades indicate a weakening of the decoupling, but that leakages will increase.     

Factors Behind the Environmental Kuznets Curve. A Decomposition of the Changes in Air Pollution

The environmental Kuznets curve theory suggeststhat economic growth in the long run may reduceenvironmental problems. In this article, we usea decomposition analysis to isolate eightdifferent factors, in order to investigate theorigins of changes in emissions to air over theperiod from 1980 to 1996. Among these factorsare economic growth, changes in the relativesize of production sectors and changes in theuse of energy. Given constant emissions perproduced unit, economic growth alone would havecontributed to a significant increase in theemissions. This potential degradation of theenvironment has been counteracted by first ofall more efficient use of energy and abatementtechnologies. In addition, the substitution ofcleaner for polluting energy types and othertechnological progressions and politicalactions have reduced the growth in emissions.Consequently, the growth in all emissions hasbeen significantly lower than economic growth,and negative for some pollutants.The results indicate that policymakers mayreduce emissions considerably through creatingincentives for lower energy use andsubstitutions of environmental friendly forenvironmental damaging energy types, inaddition to support environmental friendlyresearch or to conduct direct emission reducingactions, such as abatement requirements orbanning of environmental damaging products.This is particularly relevant to countries andsectors with relatively high energy intensitiesand low pollution abatement.     

Green Throughput Taxation: Environmental and Economic Consequences

According to optimal taxation theory, raw materials should be taxed to capture the embedded scarcity rent in their value. To reduce both natural resource use and the corresponding emissions, or the throughput in the economic system, the best policy may be a tax on material inputs. As a first approach to throughput taxation, this paper considers a tax on intermediates in the framework of a dynamic computable general equilibrium model with environmental feedbacks. To balance the budget, payroll taxes are reduced. As a result, welfare indicators as material consumption and leisure time consumption are reduced, while on the other hand all the environmental indicators improve.     

Quantifying Central Hypotheses on Environmental Kuznets Curves for a Rich Economy: A Computable General Equilibrium Study

We investigate whether the future relationships between several pollutants and per capita income in rich countries may assume the inverted U‐forms of Environmental Kuznets Curves (EKC). The emission‐augmenting effect of scaling up aggregate economic activity can be counteracted by greener composition of production and consumption, technological progress, and increased demand for environmental quality and policy. To quantify the importance of these central hypotheses, we use a CGE model with endogenous policy for Norway. Our results suggest significant future effects of all these three counteracting mechanisms. For most local and regional pollutants, they may be strong enough to prolong the falling emission trends. However, we cannot rely on reductions in emissions of climate gases and some transport‐related local pollutants. Our results also indicate that pollution leakages abroad are likely to take place.