Economic Development and the Environment

Abstract

Economic development in low-income economies is initially highly resource-intensive. Resource depletion and pollution damage is often estimated to reduce ‘real’ GDP growth by between one and two per cent per year. Growth and structural change alter the environment–development nexus in nonlinear fashion. Policy reforms, global market integration, and institutional development all alter the propensity for growth to generate environmental damage. The emergence of new trade patterns among developing countries has created new challenges in the measurement and analysis of development–environment interactions. Larger developing economies are now emerging as major sources of emissions that contribute to global climate change.