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Published on: December 9, 2012
A spatial econometric analysis of convergence in global environmental performance
Faisal Azeem Abbassi1, Mirajul Haq2
1International Institute of Islamic Economics, International Islamic University, Islamabad, Pakistan. faysalazeem@gmail.com.
Global environmental performance shows β-convergence, meaning countries are converging towards similar environmental standards. This study used the ecological footprint to analyze 88 countries from 1978-2017, finding that investments improve environmental quality while physical capital degrades it.
Area of Science:
- Environmental Economics
- Spatial Econometrics
- Sustainable Development
Background:
- Global environmental performance (EP) is crucial for sustainable development.
- Understanding convergence patterns in EP is essential for effective policy-making.
- The ecological footprint (EF) serves as a comprehensive indicator of environmental performance.
Purpose of the Study:
- To test for β-convergence in global environmental performance.
- To analyze the spatial dependence and dynamics of environmental performance across countries.
- To identify factors influencing environmental performance, including capital investment and environmental policies.
Main Methods:
- Utilized the spatial Green Solow model as the theoretical framework.
- Employed spatial econometric techniques, including Moran's I for spatial autocorrelation.
- Applied the Spatial Durbin Model (SDM) for regression analysis on data from 88 countries (1978-2017).
Main Results:
- Confirmed positive spatial autocorrelation in global environmental performance, indicating clustering of similar EP levels.
- Provided evidence for the existence of β-convergence in global environmental performance.
- Found that physical capital accumulation negatively impacts environmental performance, while break-even investment (BEI) positively influences it.
Conclusions:
- Global environmental performance exhibits convergence, suggesting a tendency towards similar environmental standards among nations.
- Spatial factors play a significant role in environmental performance dynamics.
- Policy interventions, particularly those promoting break-even investment, are vital for improving global environmental quality.
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