Working Paper: NBER ID: w27398
Authors: Aniruddh Mohan; Nicholas Z. Muller; Akshay Thyagarajan; Randall V. Martin; Melanie S. Hammer; Aaron Van Donkelaar
Abstract: A persistent issue in environmental economics is whether growth is sustainable. Pollution is a key driver of sustainability, which we define as an economy exhibiting falling pollution damages at its balanced growth path. We deduct air pollution and carbon dioxide damages from the national accounts for 163 countries between 1998 and 2018. Global pollution intensity fell from 1998 to 2008, remaining flat thereafter. China highlights the importance of defining sustainability in terms of damages; between 2011 and 2018, physical measures of environmental quality improved, but monetary damage increased by 50 percent. Sustainability based on emissions ignores this rise in damage.
Keywords: environmental accounting; sustainability; pollution damages; economic growth
JEL Codes: E13; Q51; Q53; Q54; Q56
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| economic growth (O49) | monetary pollution damages (E42) |
| monetary pollution damages fall (E49) | growth is sustainable (O44) |
| rising damages (Q54) | negative comprehensive wealth accumulation (E21) |
| pollution intensity of output (GED/GDP) fell (O44) | apparent growth in high-income countries may not be sustainable (O57) |
| emissions decline (Q52) | monetary damages associated with pollution continue to rise (Q53) |
| emissions considered alone (Q52) | misrepresentation of sustainability of growth in economies (O44) |