The most recent addition to the economics of gloom concerns the interplay between income and environmental degradation. The main question raised is whether or not continued environmental degradation is a necessary part of the process of industrialization. Will pollution continue to increase without bound as more and more countries pass through the development phase or will it be controlled? Intuitively, if 'clean air' is a normal good, we would expect that societies might be 'self-regulating' in the sense that as income increases, pollution controls also increase. However, this intuition is somewhat misleading as the presence of external effects is an essential feature of environmental regulation. This paper describes a growth model in which pollutants are internal to a jurisdiction. To this end we develop a model of the joint determination of the rate of development of the economy through market interactions and the extent of pollution regulation through collective decision making. We show that depending on the collective decision making mechanism in place, the time path of pollution can display an inverted U shape, a 'sideways mirrored' S, or an increasing (but bounded) level over time. This paper contributes to the literature on both the large differences in income per capita across countries as well as the discrepancies in their growth rates. It shows that by relying on collective decision making mechanisms to choose policies, the dynamics of convex models can resemble those usually ascribed to models of multiple equilibria.

For the assessment of the phytotoxic effects of current ozone (O3) in the lower troposphere, sensitive biological indicators are required, which allow an early indication of the impact of this gas. There is very little information concerning the usefulness of non-crop species for this purpose. This paper reports on open-top chamber studies investigating the effects of different O3 exposures on native herbaceous plant species. Plants were grown up from seeds, potted into natural soils and exposed to near-ambient O3 levels during one growing season. A wide range of visible symptoms was apparent during the exposures. Species such as Rumex obtusifolius, Senecio vulgaris or Sonchus asper showed leaf colorations (e. g. red-dish pigmentation) that probably indicate a non-specific stress response. In other species especially of the genera Malva and Cirsium the symptoms produced by O3 appeared to be similar to those characteristic for O3-specific foliar injury (stippling, flecking). In almost all species tested, O3 caused premature leaf senescence, which was sometimes associated with premature leaf abscission. However, earlier senescence did not necessarily result in changes in plant growth. Of all species tested, Malva sylvestris was found to be the most sensitive in terms of growth reduction and lower seed production.

We analyze the connection between productivity, pollution abatement expenditures, and other measures of environmental regulation for plants in three industries (paper, oil, and steel). We examine data from 1979 to 1990, considering both total factor productivity levels and growth rates. Plants with higher abatement cost levels have significantly lower productivity levels. The magnitude of the impact is somewhat larger than expected: $1 greater abatement costs appears to be associated with the equivalent of $1.74 in lower productivity for paper mills, $1.35 for oil refineries, and $3.28 for steel mills. However, these results apply only to variation across plants in productivity levels. Estimates looking at productivity variation within plants over time, or estimates using productivity growth rates show a smaller (and insignificant) relationship between abatement costs and productivity. Other measures of environmental regulation faced by the plants (compliance status, enforcement activity, and emissions) are not significantly related to productivity.