The Rise and Fall of the Environmental Kuznets Curve

This paper chronicles the story of the environmental Kuznets curve (EKC). The EKC proposes that indicators of environmental degradation first rise, and then fall with increasing income per capita. However, recent evidence shows that developing countries are addressing environmental issues, sometimes adopting developed country standards with a short time lag and sometimes performing better than some wealthy countries, and that the EKC results have a very flimsy statistical foundation. A new generation of decomposition models can help disentangle the true relations between development and the environment.

Reversal in the Trend of Global Anthropogenic Sulfur Emissions

Global anthropogenic sulfur emissions increased until the late 1980s. Existing estimates for 1995 and 2000 show a moderate decline from 1990 to 1995 or relative stability throughout the decade. This paper combines previously published data and new econometric estimates to show a 25% decline over the decade to a level not seen since the early 1960s. The decline is evident in North America, Western and Eastern Europe and in the last few years in East and South Asia. If this new trend is maintained local air pollution problems will be ameliorated but global warming may be somewhat exacerbated.

Derivation of the Hicks Elasticity of Substitution from the Input Distance Function

The Hicks or direct elasticity of substitution is traditionally derived from the production function. This paper exploits duality theory to present a more general derivation from the input distance function, which is exactly dual to the Shadow Elasticity of Substitution. The new elasticity is more general than the traditional one as it can handle situations of technical inefficiency, nonseparability between inputs and outputs, and multiple outputs, but is equal to the traditional elasticity under the classical conditions. The new derivation is related to the Morishima and Antonelli Elasticities of Complementarity in the same way that the Shadow Elasticity of Substitution is related to the Morishima and Allen-Uzawa Elasticities of Substitution. Furthermore, distance (technical efficiency) is not constant for the Morishima and Antonelli Elasticities of ComplementarityMicroeconomics; production; substitution

Global sulfur emissions in the 1990s

This paper provides global and country by country estimates of sulfur emissions for the early and mid-1990s. Raw estimates are obtained in two ways. For countries with published data we compile that data from the available sources. For the remaining countries, we use either the decomposition model estimated by Stern (1999), the first differences environmental Kuznets curve model estimated by Stern and Common (2001), or simple extrapolation depending on the availability of data on the explanatory variables. We then examine the compatibility of these estimates with the ASL estimates for 1990. Based on these and other comparisons we construct a preferred database for 1850-1999 and discuss the main movements in the 1990s. The data is available from the datasite.

Global Sulfur Emissions in the 1990s

This paper provides global and individual country estimates of sulfur emissions from 1991-2000. Raw estimates are obtained in two ways. For countries and years with published data I compile that data from the available sources. For the remaining countries and for missing years for countries with some published data, I use either the decomposition model estimated by Stern (2002), the first differences environmental Kuznets curve model estimated by Stern and Common (2001), or a simple extrapolation, depending on the availability of data to interpolate or extrapolate estimates. The results are combined with estimates from the ASL database for earlier years to develop continuous time series from 1850 to 2000. Finally, I discuss the main movements in global and regional emissions in the 1990s and compare the results to other studies. Global emissions peaked in 1989 or 1991 and declined rapidly thereafter. The locus of emissions shifted towards East and South Asia, but even this region peaked in 1996. Our estimates tend to be lower than other published studies and show a much more rapid decline reflecting the view that technological progress in reducing sulfur based pollution has been rapid and is beginning to diffuse worldwide.

Diffusion of Emissions Abating Technology

The environmental Kuznets curve (EKC) has been extensively criticized on econometric and theoretical grounds. Recent econometric results and case studies show that national emissions of important pollutants are monotonic in income but changes in technology can lead over time to reductions in pollution - a lowering of the EKC - and that pollution reducing innovations and standards may be adopted with relatively short time lags in some developing countries. This study combines the recent literature on measuring environmental efficiency and technological change using production frontier methods with the use of the Kalman filter - a time series method for signal extraction - to model the state of abatement technology in a panel of countries over time. The EKC is reformulated as the best practice technology frontier - countries' position relative to the frontier reflects the degree to which they have adopted best practice. The results are used to determine whether countries are converging to best practice over time and how many years it will take each country to achieve current best practice. The model is applied to sulfur dioxide emissions from sixteen mainly developed countries.

Energy quality

This paper develops economic definitions of energy quality for individual fuels and energy aggregates. There are both use- and exchange-value concepts as well as marginal and total measures of energy quality. A factor augmentation or quality coefficients approach corresponds to the use-value definition while indicators based on distance functions and relative prices are exchange-value based definitions. These indicators are identical when the elasticity of substitution between fuels is infinity but diverge or cannot be computed for other interfuel elasticities of substitution. Under zero substitutability only the quality coefficients approach is defined. I also find that the ratio of an energy volume index to aggregate joules cannot be considered a complete indicator of aggregate energy quality as it does not account for quality changes in the component fuels.Energy; Quality; Productivity

Environmental and Ecological Economics: A Citation Analysis

This study looks at two distinct questions: What have been the most influential journal articles in environmental economics over the ten year period 1994-2003? and, how much overlap is there between the fields of environmental and ecological economics? We examine the references in all articles published in JEEM and Ecological Economics (EE) over this period. For each of these two fields, a list of the top articles and top journals cited by articles published in JEEM and EE is presented. We also present some results based on our study of the ISI Journal Citation Reports. We find that there is a significant overlap between the two fields at the journal level - the two journals cite similar journals. There is a correlation of 0.34 between the number of citations received by the journals that are most cited and the correlation is even higher if journal self-citation is excluded. The main differences are that ecological economics tends to cite (but not be cited by) general natural science journals more often than environmental economics does, environmental economics cites more heavily from journals rather than other publications, and citations in environmental economics are more concentrated on particular journals and individual publications. However, there is much less similarity at the level of individual articles. Non-market valuation articles dominate the most cited articles in JEEM while green accounting, sustainability, and environmental Kuznets curve are all prominent topics in EE.

The structure of Australian residential energy demand

This paper presents the first national-level econometric estimates of the residential energy demand system for Australia. We estimate an Almost Ideal (AI) demand system for electricity, gas, and other miscellaneous fuels (mainly oil and wood) using quarterly data for both the country as a whole and for a panel of the five most populous States. The national data set covers the period from 1969 Q3 to 1998 Q2, while the state level data is only available from 1984 Q3 onwards. According to the national-level data, the pairs of electricity and miscellaneous fuels and gas and miscellaneous fuels are significant substitutes, whereas electricity and gas - the two main fuels - may be complements. The panel model, in contrast, finds significant substitution possibilities between gas and miscellaneous fuels only. The cross-price elasticities between electricity and gas are positive but not significant. The gas own-price elasticity is zero in the national model and unit elastic in the panel model. A national model estimated over the same shorter time period still shows complementarity between electricity and natural gas but most results are insignificant. Both large time-series and cross-sectional dimensions are valuable in estimating elasticities. Compared to North American estimates, our results show greater own price and income elasticities for natural gas and the miscellaneous category. They also show more substitutability between natural gas and the miscellaneous category.

China's Carbon Emissions 1971-2003

A number of previous studies on China's carbon emissions have mainly focused on two facts: 1) the continuous growth in emissions up till the middle of the 1990s; 2) the recent stability of emissions from 1996 to 2001. Decomposition analysis has been widely used to explore the driving forces behind these phenomena. However, since 2002, China's carbon emissions have resumed their growth at an even greater rate. This paper investigates China's carbon emissions during 1971-2003, with particular focus on the role of biomass, and, the fall and resurgence in emissions since the mid-1990s. We use an extended Kaya identity and the well-established logarithmic mean Divisia index (LMDI I) method. Carbon emissions are decomposed into effects of various driving forces. We find that: (1) A shift from biomass to commercial energy increases carbon emissions by a magnitude comparable to that of the increase in emissions due to population growth; (2) The technological effect and scale effect due to per capita GDP growth are different in the pre-reform period versus the post-reform period; (3) The positive effect of population growth has been decreasing over the entire period; (4) The fall in emissions in the late 1990s and resurgence in the early 2000s may be overstated due to inaccurate statistics. The rapid growth since the early 2000s, therefore, may not indicate a "new trend"; (5) Carbon emissions exhibit a correlation of 0.99 with coal consumption, which points to explicit policy suggestions.