Income, Trade and Pollution in Central Asia, Russia and China: An Econometric Analysis

The study performs a panel estimation of the relationship between per capita income, trade, and airborne pollution in the five Central Asian nations, Russia and China between 1992 and 2008. First, this study uses an environmental Kuznets curve hypothesis (EKC)- an inverted-U relationship between the increase in income and the level of environmental degradation - to examine how income and pollution are related. Second, the study uses a gravity model to estimate the effect of a regional trade agreement (Shanghai Cooperation Organization: SCO) on incomes and carbon dioxide emissions in the region. Empirical analysis confirms the existence of the rising portion of the EKC curve in the region - a positive correlation between per capita income growth and carbon dioxide emissions- and that the volume of bilateral trade, and not the existence of a regional trade agreement, contributes to the increasing level of environmental pollution.

Income, Trade and Pollution in Central Asia, Russia and China: An Econometric Analysis

The study performs a panel estimation of the relationship between per capita income, trade, and airborne pollution in the five Central Asian nations, Russia and China between 1992 and 2008. First, this study uses an environmental Kuznets curve hypothesis (EKC)- an inverted-U relationship between the increase in income and the level of environmental degradation - to examine how income and pollution are related. Second, the study uses a gravity model to estimate the effect of a regional trade agreement (Shanghai Cooperation Organization: SCO) on incomes and carbon dioxide emissions in the region. Empirical analysis confirms the existence of the rising portion of the EKC curve in the region - a positive correlation between per capita income growth and carbon dioxide emissions- and that the volume of bilateral trade, and not the existence of a regional trade agreement, contributes to the increasing level of environmental pollution.

Global Reuse and Optimal Waste Policy

Electronic waste generated from the consumption of durable goods in developed countries is often exported to underdeveloped countries for reuse, recycling and disposal with unfortunate environmental consequences. The lack of efficient disposal policies within developing nations coupled with global free trade agreements make it difficult for consumers to internalize these costs. This paper develops a two-country model, one economically developed and the other underdeveloped, to solve for optimal tax policies necessary to achieve the efficient allocation of economic resources in an economy with a durable good available for global reuse without policy measures in the underdeveloped country. A tax in the developed country on purchases of the new durable good combined with a waste tax set below the domestic external cost of disposal is sufficient for global efficiency. The implication of allowing free global trade in electronic waste is also examined, where optimal policy resembles a global deposit-refund system.