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Sunday, September 30, 2007

Pollution is an inferior good

The Blacksmith Institute reports their "Dirty Thirty" which are the thirty dirtiest (as in polluted) cities in the world.

Notice the lack of map-points among the OECD countries. We can hope that as the rest of the world becomes more wealthy they will insist on cleaning their local environments, much like the developed countries have done in the past thirty+ years.

It would be interesting to map GDP and pollution indicators over time for developed and newly developed countries. I would expect to see a more-or-less parabolic pattern due to the relationship you describe. In the early stages of development, nations pollute as a means to develop. In the later stages, the means of production are replaced with cleaner (and more expensive) alternatives that would have been unaffordable before. Therefore, a nation, after developing to a certain point, will be able to affordably sustain clean (or at least relatively cleaner) development.

I think the difficulty would be finding good data for the early development stages of nations like the US and Canada. Post-WWII reconstruction in Europe might act as a substitute for “early development” in Europe.
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