Environmental Engineering Reference
In-Depth Information
the EKC or the equilibrium income elasticity of pollution, as referred to
by the authors, changed its sign from positive to negative at lower income
levels. However, for pollutants, where spatial separation was more dif-
i cult and costly, the equilibrium income elasticity of pollution remained
positive.
The role of technology
Technology shifts is one of the explanations conjectured for the economic-
growth-environment relationship. Hence, some of the empirical results
were attributed to the use of cleaner technology. Komen et al. (1997)
examined the increase in income and its role in promoting new technolo-
gies to improve environmental quality. They gathered data from 19 OECD
countries for the period 1980 to 1994. The countries were Canada, United
States, Australia, Austria, Belgium, Denmark, Finland, France, Germany,
Greece, Ireland, Italy, Norway, Spain, Sweden, United Kingdom, the
Netherlands, Portugal and Japan. They carried out an empirical analysis
focusing on the relationship between real budget per capita allocated for
public research and development (PRD) and real gross per capita GDP.
The PRD, for each country, was measured as nominal expenditures
converted to 1991 US dollars at prevailing purchasing power parities.
Similarly, GDP for each country was measured in thousands of US dollars
at prevailing purchasing power parities. The results of their study showed
a positive income elasticity of public research and development funding for
environmental protection. The income elasticity was approximately equal
to unity, which implied that emissions of some pollutants might decline
after an income-level threshold was reached. The authors concluded that
their results should be interpreted with caution due to (1) the small size of
funding allocated to public research and development relative to the size
of overall spending on environmental protection, (2) the limited ability of
the country to substitute between public and private research and develop-
ment spending and alternative policy instruments and (3) the possibility
that funding for public research and development might act as a form of
industrial subsidy in some countries. The study made two main contribu-
tions. First, unlike previous research that focused on the overall linkage
between per capita income and environmental degradation, this study
focused on research and technology development, which were the underly-
ing individual components. Second, it helped to explain why the EKC had
a negative slope for some pollutants in relatively industrialized countries.
Carson et al. (1997) did not study the role of technology per se in the
income-environment relationship, however, they attributed their i ndings
to the use of the latest-vintage technology. Carson et al. examined the
existence of an EKC relationship between income and seven types of air
