The Political Economy of the Environment
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The Political Economy of the Environment

James K. Boyce

In a provocative and original analysis, James K. Boyce examines the dynamics of environmental degradation in terms of the balances of power between the winners and the losers. He provides evidence that inequalities of power and wealth affect not only the distribution of environmental costs, but also their overall magnitude: greater inequalities result in more environmental degradation. Democratization – movement toward a more equitable distribution of power – therefore is not only a worthwhile objective in its own right, but also an important means toward the social goals of environmental protection and sustainable development.
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Chapter 5: Rethinking the Environmental Kuznets Curve

James K. Boyce


(with Mariano Torras) INTRODUCTION Mounting public concern over environmental issues has sparked efforts to understand more clearly the reasons for variations in the extent of environmental degradation. One way to address this question is through international comparisons, in which the dependent variable is some measure of environmental quality, and an array of variables that theory suggests might affect this measure – directly or otherwise – is included on the right-hand side of the regression equation. The studies (for example, Selden and Song 1994; Shafik 1994; Grossman and Krueger 1995) that have attempted this have used per capita income as the chief explanatory variable of interest. The relationship between per capita income and environmental quality depends on scale, composition, and technology effects.1 If the pollution intensity of aggregate output were fairly constant across countries, we would expect environmental quality to worsen with income, as greater output generates more pollution (the scale effect). On the other hand, environmental quality could improve with income if this scale effect were eclipsed by the combination of the two other effects. With increasing per capita income, the composition of output shifts among sectors that differ in their pollution intensity of output. For instance, the service sector may grow relative to the manufacturing sector. This composition effect can alter the pollution intensity of output. Furthermore, the various sectors of the economy may adopt less-polluting technologies, either because of market-driven technological advance (spurred in part by the internal benefits of resource conservation) or government regulation (including standards, taxes,...

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