Common Tragedies

Thoughts on Environmental Economics

The primacy of technology for reducing pollution

Posted by Daniel Hall on January 2, 2008

We’ve discussed the environmental Kuznet’s curve (EKC) here at CT previously, most directly in a post where I worried that if emissions were being reduced primarily through offshoring manufacturing then eventually the world was going to run out of places to shove their pollution off on. Arik Levinson allays those fears today with an excellent post at VoxEU describing his results in a new working paper. He examines manufacturing emissions in the U.S. between 1972 and 2001, which declined by 58% while manufacturing output simultaneously increased by 71%. He estimates that 60% of the reductions in U.S. emissions between 1972 and 2001 have come from improvements in technology; at most 28% of the emissions reductions have been produced by international trade (increases in net imports). This is good news, because it implies that improved manufacturing and pollution control technologies should be able to lower the environmental impact of manufacturing regardless of where it occurs. In Levinson’s words:

If the 75% reduction in pollution from US manufacturing resulted from increased international trade, the pundits and protestors might have a case. Environmental improvements might be said to have imposed large, unmeasured environmental costs on the countries from which those goods are imported. And more importantly, the improvements in the US would not be replicable by all countries indefinitely, because the poorest countries in the world will never have even poorer countries from which to import their pollution-intensive goods. The US clean-up would simply have been the result of the US coming out ahead in an environmental zero-sum game, merely shifting pollution to different locations. However, if the US pollution reductions come from technology, nothing suggests those improvements cannot continue indefinitely and be repeated around the world. The analyses here suggest that most the pollution reductions have come from improved technology, that the environmental concerns of antiglobalization protesters have been overblown, and that the pollution reduction achieved by US manufacturing will replicable by other countries in the future.

Much more, including a cool graph, at Levinson’s original post. Do read it.

H/T: Free Exchange, of which further discussion in a subsequent post.

2 Responses to “The primacy of technology for reducing pollution”

  1. tidal said

    I think it rather important to note that he does not consider CO2 as a manufacturing emission. US CO2 emissions have risen quite dramatically over that time frame, albeit with falling “intensity” vs. GDP.

    Granted, there have been fewer incentives for US manufacturing firms to reduce CO2 over the same period…

  2. Hydra said

    The first 60% of emissions reductions is the easy part, after that it gets harder and more expensive. It may also be that we increased manufacturing output in things that are less energy intensive: assembling Toyotas here with engines cast in some other country, for example. It makes a difference whether you measure the increase in manufacturing in dollars or BTU equivalents.

    As for goods that are imported, shipping the goods takes fuel, too. It’s possible that the 28% reduction in local emissions results in an increase in total emissions, or that the 28% reduction is significantly offset.

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