Interrelationships and Causal Linkages Between Socioeconomic and Environmental Factors

Mariam, Yohannes and Barre, Mike and Urquhart, Lynda and DeCivita, Paul (1997): Interrelationships and Causal Linkages Between Socioeconomic and Environmental Factors.

Abstract

The purpose of this study was to examine interrelationship and causal linkages between socioeconomic and environmental variables in OECD countries. To aid this study, a LISREL modelling tool was implemented.

The findings of the study indicated that gross public debt increases with deterioration in air quality in North America, Asia and the Pacific, Central, Eastern and Atlantic regions of Western Europe. Energy consumption contributes to deterioration of air quality in all regions. Economic growth, measured by growth in GDP, accelerates deterioration of air quality in all regions except in Southern and Eastern regions of Western Europe. Increases in energy consumption and economic growth contribute to declines in gross public debt in most OECD countries.

Spending for environmental protection contributes to reduced emission of CO2 in all regions of Europe except Asia/Pacific and North America. Expenditure for environmental protection causes increases in public debt in all regions. However, environmental expenditure exerts positive impact on economic growth in Asia/Pacific and Central Europe. Spending in environmental protection is associated with reduction in emissions of most pollutants except in North America and Asia/Pacific and Southern regions of Western Europe.

The findings also indicated that in regions where emission of SO2 is the greatest, harvesting of forests increased while fish catches declined. Emission of NOx is associated with increases in agricultural production in most regions, except in Southern and Atlantic regions of Western Europe and North America. Emission of VOCs contributed to reduction in agricultural production in most regions except in Central regions of Western Europe. In summary, economic growth tends to significantly contribute to energy consumption and deterioration of air quality. However, the later can be improved through aggressive spending in environmental protection. Therefore, it is imperative to identify a strategy that would balance economic growth and energy consumption with improved environmental quality

• Item Type: MPRA Paper
• Language: English
• Keywords: Interrelationship; causal linkages; socioeconomic; environmental; OECD; LISREL; modeling; air quality; energy consumption; environmental protection; emission; SO2; NOx; VOCs; economic growth; human health
• Subjects: Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q48 - Government Policy; C - Mathematical and Quantitative Methods > C3 - Multiple or Simultaneous Equation Models ; Multiple Variables > C32 - Time-Series Models ; Dynamic Quantile Regressions ; Dynamic Treatment Effect Models ; Diffusion Processes ; State Space Models; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling > C51 - Model Construction and Estimation; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q57 - Ecological Economics: Ecosystem Services ; Biodiversity Conservation ; Bioeconomics ; Industrial Ecology; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q42 - Alternative Energy Sources; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q53 - Air Pollution ; Water Pollution ; Noise ; Hazardous Waste ; Solid Waste ; Recycling; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q4 - Energy > Q43 - Energy and the Macroeconomy; ; C - Mathematical and Quantitative Methods > C1 - Econometric and Statistical Methods and Methodology: General > C13 - Estimation: General; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q52 - Pollution Control Adoption and Costs ; Distributional Effects ; Employment Effects; P - Economic Systems > P1 - Capitalist Systems > P12 - Capitalist Enterprises; Q - Agricultural and Natural Resource Economics ; Environmental and Ecological Economics > Q5 - Environmental Economics > Q56 - Environment and Development ; Environment and Trade ; Sustainability ; Environmental Accounts and Accounting ; Environmental Equity ; Population Growth; C - Mathematical and Quantitative Methods > C6 - Mathematical Methods ; Programming Models ; Mathematical and Simulation Modeling > C61 - Optimization Techniques ; Programming Models ; Dynamic Analysis; C - Mathematical and Quantitative Methods > C5 - Econometric Modeling

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