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Pollution Concerns: Now or Later?

In current news, we are often subject to warnings or rebuttals against the implications of climate change. Rather than analyzing climate change as a whole, we decided to focus on the effects of pollution on productivity. Even though pollution seems like an inevitable externality of our current economy, the losses from pollution affect everyone both through aesthetic and out-of-pocket costs. No longer are we focused mainly on environmental effects such as destruction to nature, but we also consider losses to income and companies in terms of productivity. Living with low air quality means having to spend money on health costs or even air masks in parts of the world. Worsened health means absence from work and can even lower incomes according to the World Bank. They found that deaths from air pollution cost the global economy around $225 billion in 2013 due to loss of labor and economic development.

The Organization for Economic Co-operation and Development (OECD) has also projected the effects of pollution on three key areas: agriculture, health expenditures, and labor productivity. The graph below shows the impacts relative to GDP; they use the red line to highlight the global annual market cost due to air pollution.

Although the economic effects are spread out globally, individual countries are affected disproportionately due to differences in population growth and economic development. Certain developing countries emit more pollution to catch up to developed countries. This creates negative environmental effects that need to be paid for later on.

The Environmental Kuznets Curve

The Environmental Kuznets Curve (EKC) is a graph that shows the level of environmental degradation with respect to GDP growth. The Environmental Kuznets Curve is a graph showing that an initial economic development will lead to a deterioration in the environment, but when GDP reaches a certain level, society begins to improve its relationship with the environment and the level of environmental degradation decreases. This means that developing countries tend to ignore environmental health in favor of economic gain and they tend to care less about pollutions until they reached a certain level of economic development. The graph below shows how pollution affects GDP through a variety of costs.

Do you think the EKC is valid in that we should worry about the effects of pollution later? Would you agree that a country has to experience a period of high pollution before becoming a strong economy? How can countries successfully combat the effects of pollution without hurting economic growth?

Ruinan Liu and Abby Yu

24 thoughts on “Pollution Concerns: Now or Later?

  1. Juliana Kerper

    I think the EKC shows the general trend most developed countries follow when experiencing economic growth. However, I don't think we should worry about the effects of pollution after becoming a strong economy. I also don't think environmental degradation always increases until average income reaches a certain point. I think sometimes a serious environmental scare pushes industrialized economies to implement measures to combat pollution. I do think the majority of countries experiencing rapid economic growth also have a higher level of environmental degradation, and the severity of the impact on the environment can depend on regional differences. Wealthy countries, like the US, still struggle with prioritizing environmental concerns and energy, land, and resource use doesn't normally fall with rising income. Emissions of greenhouse gases are still higher in industrialized countries, which would indicate they haven't reached a high enough average income (i.e. experienced enough growth) to prioritize the environment, if we are to believe the EKC is completely valid.

    To combat the effects of pollution without hurting economic growth, it seems we'll have to turn to alternative energy sources. Implementing these new sources into homes and businesses could create jobs, and if the government is on board with clean energy initiatives, it could pump money into the economy through spending to implement clean energy.

  2. lentza20

    It seems to be the trend that part of the progression of a country, and a good indicator of the level of development of a country, is a period of high pollution. It follows that in order for a country's market to grow and for the economy to prosper there must be a period of mass production growth that when it occurs creates high pollution. It is part of the evolution of science for a country to grow and learn how to handle the trash created and to downplay the negative effects of production on the environment. With that being said, countries with the highest labor productivity have the greatest deficit from the air pollution. So what does that mean? Should countries be more aware of pollution if they are heavily vigilant of changes in GDP? Would it be worthwhile to improve pollution levels to help with the effects of it on the economy? It seems to me that regardless of a country's development, they should be aware of their environmental impact both from a morality standpoint and an economic one.

    1. yuy20

      I think the point about environmental awareness both from an economic and morality perspective is a good one. However, it can be difficult especially for developing countries which may have more manufacturing or pollution-heavy infrastructure based on their path for economic growth. As a result, it should also be the concern of other countries to use new technology to stop further development of infrastructure that harms the environment while ensuring economic growth.

  3. williamse19

    Correlation is not necessarily causation. It is my opinion that we should attempt to grow our economies with efforts to be environmentally responsible from the beginning. In fact, building on clean energy from the start would mean there would be less or no extra cost in the long-run to implement good environmental policies. I think one of the biggest barriers to clean energy is the fact that the economy was built on energy that is not clean. It is difficult and expensive to have industries go back to the drawing board with regards to this. Instead, it would be more responsible in the long-run to implement today's technology in clean energy now rather than later. Otherwise, it would cost the newly-developed economy more at a later date.

  4. hermana20

    In the textbook, a distinction is made between solar installations that rely on photovoltaic panels that cover light directly into electricity and the Solana style solar installations that consists of numerous mirrors that reflect light onto black pipes which heats them up and conveys this heat to tanks of salt that create electricity. The latter method is employed by the Spanish company Solana, and one of the biggest Solana power plants exists in Arizona. The fact that Spain, a country which is not renowned for its technological innovation and economic strength is able to provide cutting-edge green technology should be taken optimistically, because it means that poorer developing countries that are currently increasing their emissions in an effort to industrialize fast, can make the switch to green technology before it is too late. The real question is ensuring that these countries invest in green technology before they install fossil fuel infrastructure. If global temperatures increase by another 2 degrees, the effects could be really devastating, and productivity would be out of the question with the planet falling into chaos. Hurricane seasons lasting longer due to melting polar ice caps and warmer waters and longer warmer weather is no coincidence, and if this continues the impact could be more than just 20% of America's refining capacity being knocked out temporarily. Additionally, investing in green hydro, solar, nuclear, and wind energies actually creates jobs and puts people to work, as does researching new ways to create renewable energy.

    1. the prof

      A trivial point: are there any more Solana-style facilities under construction? My sense is "no" but I may be wrong. Solar has an advantage in that small installations are feasible (very small economies of scale past a certain minimum), and can be used on rooftops. But I don't know how the total costs of installation and operation vary. All this is far away from a macroeconomic topic, rather the microeconomics (or rather business case).

  5. thaia19

    What would be the best way to incentivize countries (and individual companies) to put policies in place that would reduce our impact on the environment. We've seen that telling people that our current activities could have grave implications for our future is unfortunately often ineffective, and companies would prefer to continue using the same practices rather than reduce pollution, which would lower profits.

  6. perelk20

    I think just based on logic and what the globalized world has shown us, GDP is going to increase at the expense of pollution. There needs to be a way to effectively manage pollution amongst countries. However few solutions are unilaterally beneficial. The same solutions that would work for smaller countries would not benefit countries like the United States and China. I would like to make the case that a solution will arise once these countries especially once their productivity becomes more greatly effected. I would predict that the bigger more powerful countries make a greater attempt to stop pollution once it impacts their productivity to the extent of significantly decreasing their GDP.

  7. Chris Vogel

    In order to properly answer this question, one needs to address the differences in pollutions. There are fund pollutants, which the environment can absorb in a meaningful way (CO2), and stock pollutants, which the environment has no ability to dissipate or absorb (plutonium). Therefore, addressing pollution greatly depends on the kind of pollution it is and the environmental absorptive capacity. As long as fund pollutants don’t exceed the absorptive capacity of an ecosystem, there is very little harm to society. If fund pollutants exceed this capacity, they begin to accumulate. The marginal damage of pollution increases as pollutants accumulate. Therefore, we must be very careful to not let pollution excessively accumulate. Personally, I think it is important to start combating global climate change through addressing pollution as we have already lost 80% of our coral reefs and forced many animals into endangerment. Not to mention, the billions of dollars that rising ocean levels will cause.
    Historically, many countries have experienced periods of high pollution before becoming a strong economy. This is because the marginal costs for other energy sources have been significantly lower than renewable sources. But, with advancements in technology and global pollution agreements (Paris climate accord) stronger countries may help subsidize renewable energy in order to prevent increased pollution.
    Countries can steer their policies in a way that supports research and development for green technology. It can mandate energy efficiency which will make the country more efficient without directly taxing consumers. Setting the proper per-unit tax on pollution in order to reflect the costs borne by society, could be implemented if the tax revenue is put back into GDP.

  8. gutierrezcuadras20

    The EKC is valid in that we should worry about the effects of pollution later as it can increase production costs and ultimately slow down productivity, and as we all have learned, would hinder long-term economic growth. Additionally, a developing country must experience some pollution before having a strong economy as many, in the process of reaching economic growth, have experienced heavy industrialization before turning into a service based economy. Countries that have followed this pattern include the United States and England. Regardless, I imagine that one way countries can combat the effects pollution while maintaining high productivity may be through using alternative energy sources and relying less on burning fossil fuels. However, such alternatives need to be cheaper in order to incentivize businesses to switch as many do not want to increase costs and decrease profits.

  9. Nate

    The notion that a country will pollute more in order to speed it's GDP growth has proven itself to be true in many or all worldwide economies. The United States is clearly no exception to that rule when considering how corporations ravaged the environment prior to the establishment of the EPA in 1970. For instance the Cuyahoga river, polluted by the Midwest's manufacturing industry, had to catch fire a documented 13 times before any measures or procedures were taken to clean it up. However, during the time that now-developed economies were growing and polluting, the widespread negative effects on the environment and human health were not entirely known. It would be economically viable in the short term, but not morally responsible, for developing countries to pollute with full knowledge of the negative externalities associated with such actions. They should try to focus on developing green energy infrastructure to curb air pollution and avoid fossil fuels where possible. Costa Rica, for example, places a high priority on maintaining its environment, and managed to avoid using fossil fuels as a source of energy for 2/3rd's of the previous fiscal year.

  10. wilkinsonw20

    I do not think the EKC is valid in that we should worry about the effects of pollution later on. Currently, many effects of pollution are irreversible so we would therefore only be creating a larger issue to deal with at a later date. The issue here is that developing countries cannot hope to grow or match a developed country without a period of excess pollution. The difficulty of the situation here, is that large developed nations like the US cannot ask developing countries to meet pollution caps as they have well exceeded those levels in the past to get to where they are now. I suppose one possible solution could be to have developed countries help the undeveloped ones instal cleaner energy sources as they could not do so themselves without sacrificing much needed capital for other areas of their economy.

  11. motturt20

    The EKC demonstrates a pattern of behavior that countries tend to follow depending on their level of economic development. I don't think it makes any statement about what we should or shouldn't do, but it certainly relays some facts that are supported in such a way that we can expect this behavior to continue for the foreseeable future (Barring some unprecedented technological advancement). Countries looking to advance their interests and leave behind the "third world country" designation will undoubtedly choose means of production with little regard for the impact their technological choices will have on the world at large. Alternative energy sources and high-efficiency production technologies have much higher fixed costs than lower-quality options. To limit pollution is extremely expensive, and achieves benefits that only become tangible in the long run. Countries with lower GDP's are not looking to make expensive, long term investments, and until that changes, the trend demonstrated by the EKC will probably not change.

  12. hartigank20

    The EKC shows how when a country’s economy is initially developing, they will experience a period of high environmental degradation. This makes sense because rapid growth means more usage of natural resources and depleting of the environment to help productivity. I think that a developing country should attempt to be more environmentally conscious throughout their growth. I’m not sure how this could be done, because the evidence shows that strong countries needed a period of high pollution to succeed. The highly successful countries should be more conscious of the pollution they make and look into alternate energy sources. Looking for new technologies to help the environment can influence the lower-developing countries by helping them grow without creating environmental problems.

  13. blaira19

    I think the EKC shows the countries who's economies are related to pollution, but I do not think we should worry about the effects later. We need to take action now so that our futures are not polluted. Schools in Delhi were shut down this week because the air pollution in India is terrible for your health. I do not think that a country needs to experience high levels of pollution to become a strong economy. For example, Copenhagen, Denmark has one of the strongest economies in Europe and also is among the top two countries in Europe with the best air (least amount of pollution). Countries can successfully become sustainable if the government implements rules and regulations that require companies to limit the amount of emissions into the environment. Even though some countries don't have any emission laws, it should be considered globally so that our air is breathable in the future.

  14. Mac

    It is easy to judge and criticize developing countries for industrializing and using up their nonrenewable resources. Countries in South America that are developing and increasing their standard of living are often blamed by other countries for deforestation of their natural resources. It is very difficult to control and prevent a country that is doing what is normal to promote the wellbeing of their country even if it proves detrimental to the environment. We have to be mindful of developing countries and help steer them in a healthier way to industrialize. It is our duty to provide alternative energy sources in order to limit pollution but increase the economy of developing countries. Also, pollution control is a now issue and not something that should be ignored until later. The amount of pollution being released today is not sustainable nor ideal for the world we are wanting. I think the EKC is a helpful graph for displaying the effects of blossoming economies on the environment

  15. the prof

    A complication that no one mentioned: some pollution is "local" and so the negative externalities fall on a country's own population. That increases the political pressure to do something – unsafe water, urban smog. Some however is global. So we may benefit from using a lot of energy – air conditioning and SUVs – but the impact of CO2 is felt globally. That is, we get the benefits, but only pay a share of the costs.

    Cut down the Amazonian rain forest? Not many people live there, and tropical hardwoods can be beautiful and expensive / profitable. Worse, those who benefit may not even live there – all the gain, none of the pain. Those living in river deltas will suffer, but a lot of that won't occur for 50 years, the oceans are large heat sinks. But once they warm up, reversing will likewise take a long, long time. Bad for Bangladesh. But: I as a Brazilian timber magnate can finagle rights to land, pure benefit in my lifetime. The harm will be to others long after I'm dead. So why should I care? Of course that sort of decision is made many times over, and I as a timber person only look at my own behavior. I'm also willing to lobby my government to let me cut down the rain forest.

    If everyone puts themselves first, then all lose.

  16. Lukas Campbell

    The current tactic to try and reduce pollution from business is to strongly advertise man-made global warming and its long-term effects on our planet. However, we have seen that this strategy has only marginally worked at best, possibly due to the nature of humans to be more primarily concerned with the present and short-term outcomes than long-term consequences. I believe that some sort of incentive for businesses that clean up their environmental footprint would be an effective way to reduce human-caused environmental effects, as incentives are implemented in the short term and could be convincing to businesses without hurting the economy.

  17. the prof

    • Are there major externalities? I know studies for China which show "yes".
    • So why is pollution so bad? One possibility is that it reflects preferences for food today over health tomorrow, helped by ignorance of the effects since pollution may not be visible.
    • Another possibility is that, at least until recently, most pollution was rural, and peasants don't count in the political system, which is dominated by urban elites. Such high-income urbanites also have a greater ability to mitigate pollution via water filtration systems and air conditioning and jobs that don't require that they work outside.
    • Back to externalities. A list can include lower agricultural output (acid rain, lack of water suitable for irrigation), lost workdays due to pulmonary disease (very real in Beijing), lost schooling, out-of-pocket healthcare costs, and (lead and other heavy metals) measurable cognitive impairment in children.
    • So ... does a cost/benefit calculation suggest many countries undertake too few measures to clean up their act, even though such investment may be large enough to be costly in macroeconomic terms? My sense is "YES".

  18. thaia19

    People are mainly concerned with short-term effects rather than long-term effects. Thus, a country will be more willing to use energy that will cause environmental problems down the road if it is more profitable than cleaner energy. Additionally, people in poorer countries are much less likely to care about the environmental effects of making a profit if they are struggling to feed their children. With the costs and efficacy of fossil fuels in comparison to cleaner energy, I would argue that in order to become successful a country's pollution must worsen. Once the country has become successful, then it may decide to worry about the environment. Being from Pittsburgh, I have seen firsthand the effects of high productivity in the steel industry. Although the steel industry in Pittsburgh was mostly gone in the 1980s, we still have air quality that is one of the worst in the nation.

  19. patelp20

    I do not agree that a country needs to face high levels of pollution in order to reach the level of a thriving economy like the United States. I also disagree with the Kuznets curves hypothesis that its ok to wait to combat the effects of pollution until it causes a significant decrease in GDP. I think that if you let pollution build up and up you'll reach a point where the negative effects explode. Your country will reach a point where its going to be very hard to decrease that level of high pollution and extra money will have to be allocated not only to getting rid of pollution, but also to combatting the health risks.

    1. grims20

      If you do not agree that a developing country needs to face high levels of pollution in order to establish themselves and reach an economy as successful as the U.S, what do you think are economically viable alternative methods to fossil fuels that can be used to not only improve their economy, but also sustain the poor citizens in the nation?

  20. grims20

    Climate change can be a very touchy subject when it comes to developing third-world countries. The question must be posed whether or not it is unjust and hypocritical to disallow a developing country to use pollution garnering fossil fuels as they attempt to grow, when many of the first world economically thriving nations today have already used the same fossil fuels, and now that they are successful, look to change this habit. Developing nations will put the well-being of their people and their economy above the prevention of pollution, and I believe this is the right thing to do. Until there is an alternative fuel source developed that when implemented will not negatively impact a struggling third world nation's economy, I believe that the U.S and other first world nations must allow developing nations to use fossil fuel sources, and simply find ways to reduce pollution within their own nations.

  21. Kathryn Martin

    The balance between industrial advancements and limiting pollution is extremely difficult, as also stated by many other students. Citizens of developing countries cannot realistically be held to the environmental consciousness of developed countries. Countries like China and The United States were able to grow using fossil fuels and producing excess pollution. Once countries develop enough to produce the capital to afford sustainable energy sources, then that is the time to make changes in attempts to reduce pollution. Prioritizing the current welfare of developing countries is important. However, the United States is developed enough to be able to change within our borders and hopefully influence other developed nations, mainly China, to also make changes to minimize pollution.

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