Efficiency and substitution in pollution abatement
1992
Anderson, Dennis | Cavendish, William
This paper presents the analysis and results of three simulation studies on economic growth and pollution, undertaken for the 1992 World Development Report (WDR) on Development and the Environment. Because of anticipated large increases in economic and human activity, the paper tries to determine whether and to what extent pollution could be reduced in the course of the next four decades, once environmental policies were in place, and what the effects on economic growth might be. These questions were addressed by undertaking studies in particular sectors - electric power generation, the use of gasoline and diesel fuels in urban transport, and water and sanitation - and then by gathering some information to see how far similar results might apply in other areas such as soil erosion, indoor and outdoor air pollution, emissions and effluents from various industrial activities, and the long-term reduction of CO2 emissions from fossil fuels. The paper presents the huge scale of the prospective economic benefits from reforming prices and institutional arrangements in the sectors studied, and the scope for pollution abatement through the adoption of low-polluting technologies and practices. Although the costs of the latter are sometimes significant, they are generally small when compared with the benefits of improving economic efficiency.
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