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Economic growth and the environment

Author

Listed:
  • Anderson, Dennis

Abstract

The author argues that efficient solutions to environmental problems are a means of improving a country's economic growth prospects and that policies to improve economic growth prospects will help environmental problems be addressed. Among other points he makes: The costs of avoiding pollution or environmental damage are often less than the costs of incurring it. The costs of incurring such damage take many forms, including the impact of air and water pollution on health and amenities, the loss of time and output caused by urban congestion, the health implications of hazardous wastes and poor waste treatment and disposal practices, and the decline in productivity of soils and forests that results from unsustainable agricultural and forestry practices. With exceptions, environmental problems cannot be addressed by market forces alone. In some instances, the costs of environmental damage may be borne wholly or partly by agents other than those responsible for the damage. Some sort of tax, law, regulation, or framework for negotiation will be required to bring about a convergence of private and social interests in reducing damagein an economically desirable way. When policies are not in place, economic growth may intensify environmental damage and eventually be retarded by it. By contrast, when the right policies are in place, not only may such damage (and its impact on growth) be reduced to low levels, but economic growth may help to achieve environmental improvements - through, for example, raising the finance for water and sanitation facilities or for the maintenance of forest and wildlife reserves. The most effective way to reduce environmental damage from economic activities and their expansion is to address it directly - to delink it from economic activities, so to speak - by introducing environmentally superior technologies and practices. Reducing population growth would help relieve environmental pressures in urban and rural areas, but these effects would be small in relation to two other measures: reducing waste and inefficiency and introducing environmentally superior technologies and practices. For the most part, environmental policies succeed because of certain behavioral responses they may cause - in particular, a range of substitutions and technological and managerial changes that give rise to environmentally inoffensive practices. The evidence that pollution has a disproportionately higher impact on low-income groups is overwhelming.

Suggested Citation

  • Anderson, Dennis, 1992. "Economic growth and the environment," Policy Research Working Paper Series 979, The World Bank.
  • Handle: RePEc:wbk:wbrwps:979
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    Citations

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    Cited by:

    1. Tamazian, Artur & Chousa, Juan PiƱeiro & Vadlamannati, Krishna Chaitanya, 2009. "Does higher economic and financial development lead to environmental degradation: Evidence from BRIC countries," Energy Policy, Elsevier, vol. 37(1), pages 246-253, January.
    2. Tamazian, Artur & Bhaskara Rao, B., 2010. "Do economic, financial and institutional developments matter for environmental degradation? Evidence from transitional economies," Energy Economics, Elsevier, vol. 32(1), pages 137-145, January.
    3. Shahbaz, Muhammad & Haouas, Ilham & SBIA, Rashid & Ozturk, Ilhan, 2018. "Financial Development-Environmental Degradation Nexus in the United Arab Emirates: The Importance of Growth, Globalization and Structural Breaks," MPRA Paper 87365, University Library of Munich, Germany, revised 11 Jun 2018.
    4. Muhammad, Shahbaz & Faridul, Islam & Muhammad Sabihuddin, Butt, 2011. "Financial Development, Energy Consumption and CO2 Emissions: Evidence from ARDL Approach for Pakistan," MPRA Paper 30138, University Library of Munich, Germany, revised 07 Apr 2011.
    5. Xinpeng Xu, 1999. "International Trade and Environmental Policy: How Effective is 'Eco-Dumping'?," Asia Pacific Economic Papers 287, Australia-Japan Research Centre, Crawford School of Public Policy, The Australian National University.
    6. Rasul Shams, 1995. "Environmental policy and interest groups in developing countries," Intereconomics: Review of European Economic Policy, Springer;ZBW - Leibniz Information Centre for Economics;Centre for European Policy Studies (CEPS), vol. 30(1), pages 16-24, January.
    7. Roomana N. Siddiqui & Janak Pandey, 2001. "Perception of Economic and Environmental Stressors by Urban Slum Dwellers," Psychology and Developing Societies, , vol. 13(1), pages 93-103, March.
    8. Talukdar, Debabrata & Meisner, Craig M., 2001. "Does the Private Sector Help or Hurt the Environment? Evidence from Carbon Dioxide Pollution in Developing Countries," World Development, Elsevier, vol. 29(5), pages 827-840, May.

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