Explaining Environmental Kuznets Curves: How Pollution Induces Policy and New Technology

Tilburg University CentER Working Paper No. 2000-95

25 Pages Posted: 6 Nov 2000

See all articles by Sjak Smulders

Sjak Smulders

Tilburg University - Tilburg University School of Economics and Management; University of Calgary - Department of Economics

Lucas Bretschger

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich

Date Written: September 2000

Abstract

Production often causes pollution as a by-product. Once pollution problems become too severe, regulation is introduced by political authorities which forces the economy to make a transition to cleaner production processes. We model this transition as a change in "general purpose technology" (GPT) and investigate how it interferes with economic growth driven by quality-improvements. The model gives an explanation for the inverted U-shaped relationship found in empirical research for many pollutants, often referred to as the Environmental Kuznets Curve (EKC). We provide an analytical foundation for the claim that the rise and decline of pollution can be explained by policy-induced technology shifts.

Keywords: Environmental Kuznets curve, general purpose technology, growth

JEL Classification: O41, Q20

Suggested Citation

Smulders, Jacobus (Sjak) A. and Bretschger, Lucas, Explaining Environmental Kuznets Curves: How Pollution Induces Policy and New Technology (September 2000). Tilburg University CentER Working Paper No. 2000-95. Available at SSRN: https://ssrn.com/abstract=249023 or http://dx.doi.org/10.2139/ssrn.249023

Jacobus (Sjak) A. Smulders (Contact Author)

Tilburg University - Tilburg University School of Economics and Management ( email )

P.O. Box 90153
Tilburg, 5000 LE
Netherlands
+31 13 466 2920 (Phone)
+31 13 466 3042 (Fax)

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University of Calgary - Department of Economics ( email )

2500 University Drive, NW
Calgary, Alberta T2N 1N4
Canada

Lucas Bretschger

ETH Zürich - CER-ETH - Center of Economic Research at ETH Zurich ( email )

Zürichbergstrasse 18
Zurich, 8092
Switzerland

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