Transboundary externalities in the environmental transition hypothesis

Alberto Ansuategi, Charles Perrings

Research output: Contribution to journalArticle

27 Scopus citations

Abstract

The Environmental Kuznets Curve (EKC) is a hypothesis which implies that it is possible to "grow out of environmental degradation". Most theoretical models of the EKC relation have not accounted for transboundary and intergenerational externalities nor have empirical studies provided evidence that validates an inverted U shaped relation between environmental degradation and economic growth for pollution problems where the effects are far-displaced or are long-delayed. This paper integrates the theory of transboundary externalities into the most common theoretical framework applied to the EKC hypothesis. It shows that where a significant proportion of the environmental impacts of economic activity occurs outside the territories in which those activities take place, the de-linking of growth and environmental degradation is less likely to happen. This proposition is demonstrated by assuming that decision makers have a Nash-type non cooperative strategic behavior.

Original languageEnglish (US)
Pages (from-to)353-373
Number of pages21
JournalEnvironmental and Resource Economics
Volume17
Issue number4
DOIs
StatePublished - Dec 1 2000
Externally publishedYes

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Keywords

  • Environmental transition
  • Growth
  • Kuznets
  • Pollution
  • Transboundary externalities

ASJC Scopus subject areas

  • Economics and Econometrics
  • Management, Monitoring, Policy and Law

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