Download Study on the Relationship of Economic Growth and Atmospheric

Study on the Relationship of Economic Growth and Atmospheric
Environmental Problems Based on EKC Model in Shandong Province
XIE Fuju1, 2, ZHANG Hong1, ZHENG Mingxi1
1. University of Jinan, Jinan, P.R.China.250002
2. Shandong University, Jinan, P.R.China 250100
[email protected]
Abstract: The environmental Kuznets curve (EKC) hypothesis in Shandong Province was verified
using the statistical data of economic growth and environmental pollution indicators. It was found that
relation of SO2 , soot emission intensity and economic intensity accorded with the EKC hypothesis, the
turning points were at 315.33 Yuan and 94.00 Yuan unit area respectively, and the turning time were in
1996 and 1991-1996 respectively. Further analysis showed that EKC in Shandong province is the results
of synergistic action of a variety of favorable factors, such as advantageous policy environment,
economic structure optimization, technology progress and reliability of environment protection
investment.
Keywords: Environmental Kuznets Curve (EKC), Economic growth, Environmental pollution,
Shandong Province
1 Introduction
The influences of economic growth on environment have been concerned for a long term. Building
econometric models to probe the relationship of economic growth and environmental quality indicators
and estimate intrinsic law have been being one of the research hotspot at all times. Grossman and
Krueger had found that the relation of pollutant concentration (SO2 and soot) and economic growth
accorded with converse U curve, when they studied the influences of North American Free Trade
Agreement on environment in 1991[1]. And then Theodore further defined Environmental Kuznets Curve
(EKC) for the first time in 1993[2]. Subsequently, Grossman studied 12 environment quality indicators
which obtained from 66 countries, and found that the relation of the most of the indicators and national
income per capita presented converse U curve characteristics. In other words, with the national income
per capita increasing, the pollution degree first increased and then decreased [3]. As soon as EKC was
advanced, more and more attention was concerned by economists and environmentalists all over the
world, and then large numbers of empirical studies were conducted [4-5]. Now, EKC has already been one
of the most important methods in econometric research.
EKC study started in the beginning of the 21st Century in China. Early studies concentrated in eastern
China, where environment pollution problems are more severe than those in other regions due to rapid
economy development [6-7]. In the recent years, more and more studies on Midwest region and
countrywide scale were executed, and a lot of valuable results were achieved [8-9]. Because of the large
area and significant spatial variation in China, the comprehensive indicator system which can reflect
environment deterioration and resource consumption had not been formed, and the research results were
very different.
With the economy developing rapidly, environment is confronted with the large challenge of
deterioration in Shandong province. Due to the terrain declining from south to north in Shandong
province, Waste-gas emission is difficult to diffuse, especially in winter, which leads to the atmospheric
quality deterioration. In order to probe the relation of economic growth and atmospheric pollutant level,
two new indices, of which one is pollutant emission intensity, and the other one is economic intensity,
were built to verify EKC in Shandong province.
2 Simulation of relation of economy development and atmospheric pollutant level
2.1 Indices Selection and data source
51
In this paper, two types of indices were selected as study aim, of which one type is economic growth
index, and the other type is atmospheric pollutant indices. Per capita GDP was often used as the
economic growth index in traditional EKC studies, but it can be affected by regional population density.
Therefore, per capita GDP usually inflects neither regional economical growth level nor the pressure of
economic growth on environment accurately. In order to overcome these deficiencies, economic
intensity (unit area GDP) was calculated and taken as economic growth index. Also, SO2 and soot
emission intensity (unit area pollutant emission volume) which can reflect atmospheric pollutant level
were taken as atmospheric pollutant indices. Data mainly came from “statistical yearbook of Shandong
province” from 1981 to 2008.
2.2 Model of relation of economic growth and atmospheric pollutant indices
EKC model hypotheses usually have three types, which are quadratic function, cubic function, and
logarithmic function [11]. Model hypotheses are as follow:
(1)
Ei = α + β1Y + β 2Y 2 + ε
E i = α + β 1Y + β 2Y 2 + β 3Y 3 + ε
(2)
(3)
ln( Ei ) = α + β1 ln Y + β 2 ln Y + ε
In the formula, Ei was pressure of environment, which can be expressed as atmospheric pollutant
indicators at t time. In this paper, E1 was expressed as SO2 emission intensity and E2 was expressed as
soot emission intensity, which was the dependent variables; Y was economic output at t time. Here, it
can be expressed as per capita GDP, which was independent variable in the EKC model; α was
characteristic parameter; β1 ,β2 ,β3 were model parameters; ε was random error. Quadratic function,
cubic function, and logarithmic function were conducted regression analysis respectively to find out the
optimal one.
（ ）
2
2.3 Simulated result and analysis
2.3.1 Simulation of relation of SO2 soot emission intensity and economic intensity
The regression results showed that logarithmic function was optimal in the three fitted equation (table 1
and figure 1), and then regression equation were obtained (equation 4, 5). It can be concluded that
relation of SO2 soot emission intensity and economic intensity accorded with EKC, which meant that
with the improvement of economic intensity, pollutant emission first increased, and then decreased. The
turning point of SO2 emission intensity regression equation, which was taken from the derivative of
regression equation, presented at 315.33 unit area GDP in 1996, while which of soot emission intensity
presented at 94.00 unit area GDP in 1991, and continued for 5 years, then decreased in 1996. Thus it can
be seen that relation of economy development and atmospheric pollutant level accorded with EKC, and
the turning point of pollutant level decreasing in 1996.
(4)
ln(E1 ) = −0.12 + 0.955lnY − 0.083lnY 2
2
(5)
ln( E 2 ) = −0.208 + 0.927 ln Y − 0.102 ln Y
、
、
Table 1 Logarithmic regression results of SO2 and soot emission intensity and economy intensity
Environment
Regression results
Turning point
F value
R2
indicators
α
β1
β2
Unit area GDP (Yuan)
Year
Ln (E1))
0.750
38.541
-0.120 0.955
-0.083
315.33
1996
Ln (E2)
0.737
20.585
-0.208 0.927
-0.102
94.00
1996
2.3.2 Result analysis
The relation of economy development and atmospheric pollutant level accorded with EKC, and the
turning point of pollutant level decreasing appeared in 1996, which can be explained as follows:
First, economic structure optimization and technology improvement were the main reasons. Figure 2
showed that there were two different stages of relation of secondary industry percentage and
atmospheric pollutant level in Shandong province. The one stage was from 1990 to 1996, during which
with increasing of percentage of the secondary industry, pollutant emission intensity had showed upward
52
trend volatility. The other one was after 1996, during which pollutant emission intensity had decreased
rapidly with increasing of percentage of the secondary industry. This can be explained that the pollutant
emission intensity in the secondary industry was higher than that in the primary industry at the primary
stage of industrialization. With the industrialization deepening, technology improving, industrial
structure optimization, especially cleaner production technology being used broadly, pollutant emission
intensity decreased dramatically.
3
3
3
2
2
●
— Observed ;
2008
2005
2002
1999
1996
1993
1990
1981
2008
2005
2002
1999
1996
1993
1990
0
1987
0
1984
1
1981
1
1987
1
1984
ln
E1
ln(E2)
）2
（21
— Regress Curve
Figure 1 Logarithmic regression results of pollutant emission intensity and economic intensity
Secondly, the environment protection mechanics was established, and a series of environment protection
policies were published, which can be profitable for atmospheric quality improvement. These policies
involved that total control target had been considered to national economic and social development
annual plan for the first time, and environment protection work had been brought into the evaluation
system of government and leaders, and so on. Through these policies and measures, decision-makers
had improved their environment protection consciousness, and environment protection works had been
reinforced.
In the meantime, investment of environment protection has increased with years. The increasing extent
attained to 35% from 1996-2005, which was far higher than that of GDP in the same term. The
investment of environment protection had already occupied proportion from 5% of GDP in 1996 to 35%
in 2005 [10]. Since “the Eleventh Five-Year (2001-2005) Plan for National Economic and Social
Development” was executed, 3.6 hundred billions had been invested to build the ecological province.
Main investment projections included sewage treatment plants building in cities, pollution controlling of
1000 heavy polluting enterprises, desulphurization facilities equipping for sixty percent of all the
electric power plant in Shandong province. Based on these powerful policies and a large number of
investments, atmospheric environment quality had already improved a lot from 1996.
Thirdly, according to some research, foreign directly investment (FDI) can play an important role in the
relation of economics growth and environment pollutant level [11]. Environment pollutant level first had
decreased through importing productions in polluting industries in some nations (usually developed
nations), which led to EKC relation of economics growth and environment pollutant level by transfer
overseas of their own environment pressures. But status in other nations, where they had to accept the
polluting industries (often developing nations), were quite another thing, and typical EKC characteristics
can not showed for quite long time. In other converse views, international trade can make “green
technology” spread and improve environment quality level in more and more nations. Shandong
province locates in the forefront of the eastern coastal areas to attract foreign investment in China. So
the influences of FDI especial FDI structure on environment can not be ignored.
FDI in Shandong province has increased since reform and opening policies were executed. FDI structure
has improved a lot during “the tenth Five-Year (1996-2000) Plan for National Economic and Social
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、
10
01
97
05
20
20
19
SO2 emission intensity
93
0
Percentage of secondary industry
%
20
81
05
01
20
97
20
93
19
89
19
19
19
19
85
0
30
19
10
40
89
20
81
SO2 emission intensity
30
）
（
50
19
40
60
19
10
8
6
4
2
0
50
（
85
60
70
9
8
7
6
5
4
3
2
1
0
19
16
t/km 2
（ 1412
）10
soot emission intensity
70
t/km 2
） 18
percentage of secondary industry
%
Development”, of which the FDI percentage of three industries were 3.2% 84.7% and 12.1%
respectively. Manufacturing had become the important industry of FDI. The agriculture and services
industry percentage of FDI, such as manufacture of primary products, communication equipment, and
computer and other electronic equipment, textile and garment, and so on, were higher than that of other
industries. Thus it can be seen, atmospheric pollutant emission intensity had decreased, with the
transferring of FDI from traditional heavy-polluting industries to products manufacture and high-tech
industries. The development model, which keeps to FDI inflow, then technology overflow, industrial
structure improvement at last, can be expected in Shandong province.
Soot emission intensity
Percentage of secondary industry
Figure 1 Change of pollution emission density and the parentage of the secondary industry
3 Conclusions and prospects
(1) The logarithmic regression results showed that relation of SO2 and soot emission intensity and
economic intensity accorded with EKC in Shandong Province, and the turning point present at 315.33
Yuan and 94.00 Yuan respectively in 1996.
(2) The EKC of economic growth and atmospheric environment quality was the results of synergistic
action of a variety of favorable factors, such as advantageous policy environment, economic structure
optimization, technology progress and reliability of environment investment.
(3) Studies on economic intensity and pollutant emission intensity used to verify EKC, has not still been
found in literatures. So the research results lack of comparability, and wait for further validation in
regions, where natural, social and economical conditions are different.
：
Acknowledgments
This paper is supported by Social Science Planning Projection of Shandong Province (No. 08JDC053)
and Soft Science Projection of Shandong Province (No. 2009RKA089).
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