Essays on Environmental Degradation

Abstract

Reducing natural resources like air, soil, and water through which the environment has deteriorated is called environmental degradation. It's also defined as any change that is undesirable to the environment. The main drivers of ecological change are population growth, economic growth, and technological innovation. Both developed and developing countries are conscious of environmental damage. Developed countries partially reduce the environmental damage by shifting some of their production to developing countries, thus shifting their pollution towards developing countries. This benefits the countries' development because it creates employment and reduces poverty and migration. So, there is a need for technological innovation in developing countries to reduce environmental damage. An indirect effect of trade openness on the quality of the environment is described in chapter 2. The impact of trade openness on environmental quality is investigated through three channels: scale, composition, and technique effect. The spatial econometric approach is used to obtain empirical results, and data from 2000-2018 for the whole world is used. Scale effect increases carbon dioxide emission. Environmental quality improves due to the technique effect. The composition effect is harmful to the quality of the environment. In developed countries, the scale effect positively impacts carbon dioxide emissions. The technique effect and composition effect reduce carbon dioxide emission. In contrast, the scale effect and composition effect worsen the environmental quality, and the technique effect improves the quality of the environment in developing countries. In the third chapter, this study analyzes the link between economic growth and air pollution based on the concept of the Environment Kuznets Curve (EKC) hypothesis, which implies a reversed U-shaped association between economic development and air pollution in six dissimilar regions comprising Latin America and the Caribbean, East Asia and the Pacific, South Asia, the Middle East, and North Africa, Europe, and Central Asia, and Sub-Saharan Africa from 2000 to 2018. Panel data econometric models (random and fixed effect models) and spatial panel data models (spatial error models) are employed to get empirical results. The EKC hypothesis is validated in all the regions stated above, excluding Sub-Saharan Africa. Hence, the hypothesis that dissimilar regions have unlike EKC relationships is verified. A trade-environment association is affected by institutional quality. So, chapter 4 is about the non-linear link between trade openness and the quality of the environment for the whole world and then for developed and developing countries from 2000-2018. The panel threshold model is employed, and the findings are that trade openness is harmful to the quality of the environment in the low institutional quality regime, and it is favorable to environmental quality in the high institutional quality regime. Trade openness worsens the environmental quality before and after the threshold in developing countries. Scale effect increases carbon dioxide emission before and after the threshold. The technique effect improves the environmental quality before and after the threshold. In developed countries, only the composition effect reduces carbon dioxide emission before and after the threshold.