Environmental Policy Stringency, Technical Progress and Pollution Haven Hypothesis

Abstract

The present inquiry provides a common ground for the analysis of two strands of literature, the environmental Kuznets curve (EKC) and the pollution haven hypothesis (PHH). To this end, the study sets out a simple variational model, which identifies the structural composition of the economy and the level of economic development as the primary determinants of the magnitude of the domestic environmental degradation. The juxtaposition of the mentioned literature strands undermines the optimistic view that economic growth, in the long run, leads to the reduction of atmospheric pollution. To assess the empirical validity of the pollution haven conjecture, the study employs the OECD Environmental Policy Stringency Index and the refined data on carbon emissions embodied in imports for the dataset of 26 OECD countries in the time interval between 1995 and 2011. By employing pooled mean group (PMG) estimators, the study, for the first time, accounts for a number of issues mentioned in the literature as factors that confine the inferential power of existing empirical studies on the EKC. The strong and robust confirmation of the pollution haven conjecture indicates that at least in the context of global common pool resources, a purely national perspective of the EKC is not satisfactory.

Environmental Kuznets Curve and the Pollution-Halo/Haven Hypotheses: An Investigation in Brazilian Municipalities

“…Most studies following this approach confirm the existence of an inverted U-shaped (and other curve shapes) for the relationship between growth and emissions (i.e., EKC) in many countries and regions [6][7][8][9]. Still, Al-mulali et al [10] and Sadik-Zada and Ferrari [11] state that this transition in the GDP-CO 2 relationship depends on the region's economic development stage and technology adoption, which arguably explains how the EKC theory still generates debate across distinct regions/countries. Accordingly, pollutant emissions are the most critical environmental problem worldwide, and their reduction is part of the political agenda and international organizations debate, such as the Paris Agreement and the 2030 Agenda for Sustainable Development [12].…”

Carbon Emissions Trading and Sustainable Development in China: Empirical Analysis Based on the Coupling Coordination Degree Model

“…On the one hand, the study did not consider the issue of “carbon leakage”. The relationship between the stringency of environmental policies and pollution havens was explored and the pollution haven hypothesis was supported in the study by Sadik-Zada and Ferrari (2020) [ 47 ]. Whether the increase in the level of sustainable development in the pilot areas of carbon trading policies is influenced by pollution transfer is a very valuable research topic, which is worthy of further discussion.…”

The role of governance in quality education in sub‐Saharan Africa

“…2014; Sadik‐Zada et al . 2019a, 2019b; Sadik‐Zada 2020; Sadik‐Zada and Ferrari 2020; Niklas and Sadik‐Zada 2019; Sadik‐Zada and Loewenstein 2020).…”