Abstract
There are various types of environmental indexes or indicators in the literature. In this paper, we propose a new index that is able to point out the important relationship between environmental protection and investments in innovation processes. We identify the index with the acronym EICI (environmental innovation comparative index). This new empirical tool can represent a new way to illustrate how the level of innovation can determine different levels of air pollution in the world. We use generalized method of moments (GMM) and ordinary least squares (OLS) models to investigate how this new index impacts the variations in greenhouse gas emissions and we underline some fundamental policy implications. Considering the levels of the EICI and the empirical analysis of the role of this index then we conclude that enforcing new environmental agreements with some fundamental rules, as the incentive to reduce the technological gaps among the countries, is crucial to protect the environment and at same time stimulate the investment for innovation in all countries of the world.
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Notes
Basically in the GPI the economic indicators are the following: the Personal Consumption Expenditures, the Income Inequality, the Adjusted Personal Consumption, the Cost of Consumer Durables Calculated, the Value of Consumer Durables, the Cost of Underemployment, the Net Capital Investment. Among the environmental indicators it considers: the Cost of Water Pollution, the Cost of Air Pollution, the Cost of Noise Pollution, the Loss of Wetlands, the Loss of farmland soil quality or degradation, the Loss of Primary Forest and damage from logging roads, the CO2 Emissions, the Cost of Ozone Depletion and Depletion of Non-Renewables. Finally in the index are included the following social indicators: Value of Housework and Parenting, Cost of Family Changes, Cost of Crime, Cost of Household Pollution Abatement, Value of Volunteer Work, Loss of Leisure Time, Value of Higher Education, Value of Highways and Streets, Cost of Commuting, Cost of Auto Accidents.
The final score of EVI is calculated by using this formula: \(EVI = 100*\mathop \sum \nolimits_{i = 1}^{n} \frac{Indicator\; Scale\; Value}{n}\) where n = total value of indicator.
Generally, Alan Heston and Robert Summers (with others) created the PWT to construct consistent national accounts comparisons across countries as well as over time. This tool can generate a System of Real National Accounts (SRNA) that makes inter-spatial comparisons possible. In the latest version 8.0 of the PWT there are 29 variables for 167 countries (for China there are two versions). The approximately 6000 annual time series begin in the 1950 and end in the 2011.
PWT is selected due to its more detailed temporary and spatial information compared with the WBD; moreover, we can examine a sample of 68 countries instead of 60 countries when using the WBD.
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Barra, C., Bimonte, G. & Senatore, L. Cooperation, diffusion of technology and environmental protection: a new index. Qual Quant 53, 1913–1940 (2019). https://doi.org/10.1007/s11135-019-00848-y
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DOI: https://doi.org/10.1007/s11135-019-00848-y