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Edited by Jon C. Lovett and David G. Ockwell
Chapter 12: Economic Growth and the Environment
Dalia El-Demellawy Introduction This chapter critically reviews empirical literature on the relationship between economic growth and the environment. It starts with outlining the debate around the relationship and then presents basic models used in the empirical studies. Finally, the various empirical studies are discussed. Study of the relationship between economic growth and the environment goes back to the 1960s. It started in developed countries when considerable concern arose regarding the impact that economic development was having on their environment. This growing concern led to the 1972 United Nations World Conference on the Human Environment in Stockholm. This conference highlighted the conflict of interest between developed and developing countries regarding the relationship between economic growth and the environment. The developing countries were more concerned with development at the expense of the environment. In other words, slowing economic development to protect the environment was not appreciated. Even in developed countries there was conflict of interest among different groups in society, with workers ranking improvements of their standard of living associated with technological advancements above environmental concerns (Beckerman, 1992). Despite conflict of interest, concerns about the natural environment and its link to problems of economic development were explicitly stated. It was argued that exhaustion of the environmental resource base, in terms of minerals and food production, would provide limits for future economic growth. However, it was not thought that economic collapse was inevitable. On the contrary, it was concluded that the world economic system could be sustainable into the future provided that radical...
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