Environmental Engineering Reference
In-Depth Information
However, this was due to changes in relative share rather than a decline in
consumption.
The extent of the so-called pollution haven hypothesis (PHH) in
explaining the EKC relationship was assessed by Cole (2004). The PHH
was dei ned as the migration or displacement of pollution-intensive
industries from developed to developing countries due to more stringent
environmental regulations in the former countries. The author estimated
the EKC model for ten air and water pollutants for a sample of OECD
countries over the period 1980 to 1997. The air pollutants were CO
2
, NO
x
,
SO
2
, CO, SPM and volatile organic compounds (VOC), while the water
pollutants were the level of nitrates, the level of phosphorous, BOD and
the levels of dissolved oxygen. To capture the PHH ef ects, the author
included the share of pollution-intensive exports and imports to and from
non-OECD countries in total exports and imports. He also included the
share of manufacturing in GNP to capture the ef ect of structural change
within the economy on pollution. To rel ect trade openness/intensity, the
author used the ratio of the sum of imports and exports to GNP. Cole
found that, with the exception of VOC and CO, all the other eight pollut-
ants exhibited an EKC relationship with per capita income, with turning
points ranging between $1973 and $35 140. He also found a positive rela-
tionship between the manufacturing share of GNP and environmental
quality for eight pollutants, of which seven were statistically signii cant.
This indicated that structural change within the economy was partially
responsible for pollution reduction at higher income levels. With respect
to PHH, Cole found mixed results. There was a negative relationship
between the share of pollution-intensive imports to total imports and envi-
ronmental quality for seven pollutants (i ve air pollutants and two water
pollutants), of which i ve were statistically signii cant. On the other hand,
there was a positive relationship between the share of pollution-intensive
exports to total exports and environmental quality for i ve pollutants (one
air pollutant and four water pollutants), of which four were statistically
signii cant. Nevertheless, upon omitting the pollution haven variables, the
EKC turning points were lower for eight out of the ten pollutants, suggest-
ing that these ef ects contributed to the reduction of emissions at higher
levels of income. With respect to trade openness, the author found a nega-
tive relationship between trade openness and environmental quality for
eight out of the ten pollutants, of which six were statistically signii cant.
The author concluded that the reduction in emissions at higher levels
of income was due to higher demand for environmental regulation and
investment in abatement technologies, trade openness, structural change
within the economy and increased imports of pollution-intensive indus-
tries. Nevertheless, the author could not ascertain that the developing
