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Economic Development and Environmental Quality Nexus in Developing and Transition Economies

Abstract : This thesis tackles one of the most debatable and in vogue topics in economics, namely the economic development and environmental quality nexus. Notably, it studies the economic development's effects—in terms of its economic, social, and political dimensions—on the environmental quality for developing and transition economies. Chapter I, which is divided into three key phases, namely theoretical review, empirical exercise, and empirical review, contributes to the literature by giving various insights regarding the link between economic growth and environmental pollution in developing and transition economies. Overall, it reveals that the recent empirical studies, indeed, succeeding to curtail some of the deficiencies suggested by theoretical contributions, might indicate a certain consensus regarding pollution-growth nexus and Environmental Kuznets Curve (EKC) hypothesis validity. Chapter II examines the pollution-growth nexus in Central and Eastern European (CEE) countries, adding to the related empirical literature using the extended EKC hypothesis as a theoretical background. On the one hand, it unveils an increasing nonlinear link between GDP and CO2 at the aggregate level, which is powerfully robust to different estimators and control variables. On the other hand, the country-level analysis reveals that the relationship between GDP and CO2 is characterized by much diversity among CEE countries. Thus, despite an aggregated upward trend, some CEE countries managed to secure both higher GDP and lower CO2 emissions. From a policy perspective, EU policymakers could pay more attention to these countries and amend the current unique environmental policy to account for country-heterogeneities to support economic growth without damaging the environment. Chapter III investigates the aggregated and sector-specific CO2 emissions' responsiveness following exogenous shocks to growth and urbanization, considering a transmission scheme that incorporates two of the widely used instruments in mitigating environmental degradation—renewables and energy efficiency. First, robust to several alternative specifications, the results indicate that output, urbanization, and energy intensity increase the aggregated CO2 emissions, while renewable energy exhibits an opposite effect. Moreover, regarding the CO2 responsiveness in the aftermath of output and urbanization shocks, the pattern may suggest that these countries are likely to attain the threshold that would trigger a decline in CO2 emissions. However, the findings are sensitive to both countries' economic development and Kyoto Protocol ratification/ascension status. Second, the sector-specific analysis unveils that the transportation, buildings, and non-combustion sector exhibits a higher propensity to increase the future CO2 levels. Generally, this chapter may provide useful insights concerning environmental sustainability prospects in developing states. Chapter IV explores the effects of political stability on environmental degradation, giving a renewed perspective on this topic in developing states. It shows that a nonlinear, bell-shaped pattern characterizes the relationship between variables at the aggregate level. Moreover, while this result is robust to a broad set of alternative specifications, significant heterogeneities are found regarding countries' distinct characteristics and alternative pollution measures. Besides, the country-specific estimates unveil contrasting patterns regarding the relationship between CO2 and political stability. Broadly speaking, the findings suggest that both the formal and informal sides of political stability play a vital role in mitigating CO2 pollution in developing countries, and may provide meaningful insights for policymakers. (...)
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Submitted on : Tuesday, May 4, 2021 - 12:07:08 PM
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Alexandra-Anca Purcel. Economic Development and Environmental Quality Nexus in Developing and Transition Economies. Economics and Finance. Université Clermont Auvergne; Universitatea Babeș-Bolyai (Cluj-Napoca, Roumanie), 2020. English. ⟨NNT : 2020CLFAD013⟩. ⟨tel-03216720⟩



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