Academic journal article Journal of Sustainable Development

Environmental Quality in Economic Development in Low-Income Countries: Application of an EQT Model Using Cross-Country Sample Data

Academic journal article Journal of Sustainable Development

Environmental Quality in Economic Development in Low-Income Countries: Application of an EQT Model Using Cross-Country Sample Data

Article excerpt

Abstract

Past studies have tended to inquire as to whether there is evidence that economic growth negatively impacts environmental quality. This remains and has always been an ample question to ponder with regard to the case of high-income countries. In terms of the low-income countries, however, the reverse question seems to be more appropriate given that the main concern in these countries is relatively more about growth than the environment. This paper develops an Environmental Quality Trajectory (EQT) model and applies it to provide a theoretical and empirical analysis of the importance of environmental quality, and how it impacts economic growth and development for developing countries. The study reveals some very important issues concerning the environment and the major factors that shape its role in economic growth and development in low-income countries. And most importantly, the study's results appear to generally lend support to aspects of the Ruttan-Kuznets propositions about the relationship between income and environmental quality in developing countries, and at the same time seem to refute some aspects of it, to the effect that the implications of the environmental Kuznets curve does not seem to hold equally to all low-income countries per se, as ordinarily believed hitherto.

Keywords: environmental quality, environmental degradation, pollution haven, kuznets curve, economic growth, depletion stress

(ProQuest: ... denotes formulae omitted.)

1. Introduction

This paper presents an Environmental Quality Trajectory (EQT) model that is applied to determine effective ways of implementing some growth-enhancing environmental quality management for low-income countries. Past studies have tended to inquire as to whether or not there is evidence that economic growth negatively impacts environmental quality (Alpay, 2001; Grossman & Krueger, 1994). This remains and has always been an ample question to ponder with regard to the case of high-income countries. In terms of the low-income countries, however, the reverse question seems to be more appropriate given that the main concern in these countries is relatively more about growth than the environment. More specifically, it has become a well recognized notion among economists and policy makers that a nation's environmental situation does have some significant bearing on its state of economic growth and development. And for developing countries, the environmental degradation problem is compounded by their being generally perceived and used as pollution havens (Levinson & Taylor, 2013).

Environmental degradation retards economic growth in low-income countries, both in the short run and long run; but poor countries seem to believe that they need to achieve high levels of economic growth in order to address their rising poverty levels. Thus, many developing countries appear to have adopted an environmental attitude of "grow the economy first, and then clean up any environmental shortfall later". Therefore, as pollution havens, the pace of environmental degradation in the developing countries tends to be far ahead of the situation in the rich developed countries. And because of the immense negative impacts that environmental degradation portends for potential economic growth and development in poor countries, the present EQT model is hereby proposed to evaluate the lax environmental quality attitudes in poor countries, and to explore policy options for alternative approaches for reduction of the massive levels of environmental degradation that tend to retard the pace of economic growth and development in these societies.

Applying the Ruttan-Kuznets model (Chapman, 1999) based on the proposal that the demand for environmental quality increases with the level of income as well as the rate of increase in income, to the effect that a positive relationship exists between environmental degradation and income at low income levels, while a negative relationship exists between these at high income levels, we develop an Environmental Quality Trajectory (EQT) model. …

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