Economic Development and the Environment - The World Bank

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WorwDl evelopmenRt eport

Officeofthe VicePresident DevelopmenEt conomics The WorldBank August1992 WPS 961

6ty-C- Q+6/

Backgroundpaperfor WorldDevelopmenRt eport1992

EconomicDevelopment andthe Environment

Conflictor Complementaitdy?

Wilfred Beckerman

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On the whole,there is a strong positiverelationshipbetween income level and environmentalquality, and developingcountriesmaybeexpectedto improveenvironmentalqualityastheir incomerises.But newfactorsmay changetheusualpattern:new pollutants,cross-borderenvironmentaleffects,"trade" in polluting activities,and the growthof automobiletraffic.Consequently,developingcountriesareunlikelyto replicateprecisely

the environmentalhistoriesofdevelopedcountries.

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Policy Research

WorldDevelopmenRt eport

WPS 961

This paper- a productofthe Officeofthe VicePresident,DevelopmentEconomics- is onein a series ofbackgroundpaperspreparedforthe WorldDevelopmentRepor1t 992.The Report,ondevelopmentand the environment,discussesthe possibleeffectsofthe expecteddramaticgrowt.hin the world'spopulation, industrialoutput,use of energy,and demandfor food.Copiesof this and otherWorldDevelopmentReport backgroundpapersare availablefree fromthe WorldBank,1818H Street,NW, Washington,DC 20433. Please contactthe WorldDevelopmentReportoffice,roomT7-101,extension31393(August 1992,42 pages).

Although,in the courseof developmentsome featu;es ofthe environmentin developing countriesmay get worse,in the longerrunthey will be ableto reversetrendsin more common formsof air polution andto attainlevelsof water supplyand sanitationessentialto an acceptable,healthystandardof living.On the whole,says Beckerman,thereis a strongpositive relationshipbetweenincomeleveland environmental quality.

In the developedcountries,effectivemeasures to combaturban air pollutionwereintroducedonly whenit had reachedalmostintolerablelevelsin manycities.This doesnot mean that as countriesdevelopthey will replicate preciselythe environmentalhistoriesof developed countries.The path of environmental pollutionin the developingworldtodaywil probablydiffer fromthatof the pastin at least four respects:

- Changesin technology,relativeprices, patternsof output,and policiesmeanthat althoughtraditionalpolutants havebeen brought undercontrolin many (mainlydeveloped)

countries,the worldis facedwithnewerpollutants,or with"old" pollutantsthat, on accountof theirscaleor accumulation,have acquirednew significance.

* The globalcharacterof manypollutantsis becomingmore serious.Today,even leaving asidethe issuesof globalwarmingand ozone depletion,thereis evidenceof seriousregional environmentaleffectsof acidrain andof marine or riverinepollution.

* "Internationaltrade"in pollutingactivities addsa relativelynewelement.Developing countriesmay suffernot only fromtheirown pollutionbut alsofrom "imported"polution, as enterprisesshifttheirmore pollutingactivities from countrieswithstrictcontrolsto countriesin whichenvironmentalconsiderationsdonot have a high priority.

* Today,the fast growthof automobiletraffic meansthat emissionsof carbonmonoxideor nitrousoxideshave becomea seriousproblem; in the past,the chief formof urbanpoUutionwas densesulfurdioxide,or smoke.

ThePolicyResearchWorkingPaperSeriesdisseminatetshefindingsofworkunderwayin theBank.Anobjectiveoftheseries

is to get these findingsout quickly,even if presentationsareless thanfuly conclusionsin thesepapersdo not necessarilyrepresentofficialBankpolicy.

polished.The

findings,interpretations,and

Producedby thePolicyResearchDisseminationCenter

ECONOMIC DEVELOPMENT AND THE ENVIRONMENT: CONFLICT OR COMPLEMENTARITY? Wilfred Beckerman* Balliol College Oxford University

Preparedas a Backgroundpaper for the World DevelopmentReport 1992

* Inpreparingthis paper I have relied extensivelyon the generousco-operationand assistanceof Andrew Steer and his colleagueson the 1992WDRteam and numerousother membersof the Bank staff, and to Paul Gruenwaldfor invaluableassistancein preparingthe diagrams and statisticalannex.

The World Development Report 1992, "Developm.nt and the Environment," discusses the possibleeffects of the expecteddramaticgrowthin the world's population.industrialoutput, use of energy, and demand for food. Under current practices, the result could be appalling environmental conditions in both urban and rural areas. The World Development Report presents an alternative, albeit more difficult, path - one that, if taken, would allw future generations to witness improved environmentalconditions accompanied by rapid economic developmentand the virtual eradicationof widespreadpoverty. Choosingthis path will require that both industrialand developingcountries seizethe current momentof opportunityto reform policies, institutions, and aid programs. A two-fold strategy is required.

* First, take advantageof thepositivelinksbetweeneconomicefficiency,incomegrowth, and protection of the environment. This calls for accelerating programs for reducing poverty, removingdistortionsthat encouragethe economicallyinefficientand environmentallydamaging useof naturalresources, clarifyingpropertyrights,expandingprogramsfor education(especially for girls), familyplanningservices, sanitationandclean water, and agriculturalextension,credit and research.

* Second, break the negative links between economic activity and the environment. Certain targeted measures, described in the Report, can bring dramatic improvements in environmentalqualityat modestcost in investmentandeconomicefficiency. To implementthem will require overcomingthe power of vested interests, building strong institutions, improving knowledge,encouragingparticipatorydecisionmakinga, nd buildinga partnershipof cooperation between industrial and developingcountries. Other World DevelopmentReport backgroundpapers in the Policy Research Working Paper series include:

Dennis Anderson, "EconomicGrowthand the Environment"

DennisAndersonand WilliamCavendish,"Efficiencyand Substitutionin PollutionAbatement: Simulation Studies in Three Sectors"

WilliamAscher, "Copingwith the DisappointingRatesof Return of DevelopmentProjectswith Environmental Aspects"

Edward B. Barbier and Joanne C. Burgess, "Agricultural Pricing and Environmental Degradation"

RobinW. Batesand Edwin A. Moore, "CommercialEnergy Efficiencyand the Environment"

Wilfred Beckerman, "Economic Development and the Environment: Conflict or Complementarity?"

Richard E. Bilsborrow, "Rural Poverty, Migration, and the Environment in Developing Countries: Three Case Studies"

Charles R. Blitzer, R.S. Eckaus, Supriya Lahiri, and AlexanderMeeraus, (a) "Growth and Welfare Losses from Carbon Emission Restrictions: A General EquilibriumAnalysisfor Egypt"; (b) "The Effectsof Restrictionsof Carbon Dixideand MethaneEmissionson the Indian Economy"

Judith M. Dean, "Trade and the Environment:A Surveyof the Literature"

Behrouz Guerami, "Prospectsfor Coal and Clean Coal Technology"

David 0. Hall, "Biomass"

Ravi Kanbur, "Heterogeneity,Distribution and Cooperation in Common Property Resource Management"

ArikLevinsonand SudhirShetty, "EfficientEnvironmentRegulation:CaseStudiesof Urban Air Pollution"

Robert E.B. Lucas, David Wheeler, and Hemamala Hettige, "Economic Development, EnvironmentalRegulationand the InternationalMigrationof Toxic IndustrialPollution: 1960-1988"

Robert E.B. Lucas, "Toxic Releasesby Manufacturing:World Patterns and Trade Policies" AshokaMody and Robert Evenson, "Innovationand Diffusionof EnvironmentallyResponsive

Technologies"

David Peai, "EconomicValuationand the NaturalWorld" Nemat Shafik and Sushenjit Bandyopadhyay,"EconomicGrowth and EnvironmentalQuality:

Time Series and Cross-CountryEvidence"

Anwar Shah and Bjorn Larsen, (a) "Carbon Taxes, the GreenhouseEffect, and Developing Countries"; (b) "World Energy Subsidiesand Global Carbon Emissions"

Margaret E. Slade, (a) "EnvironmentalCosts of Natural ResourceCommodities:Magnitudeand Incidence"; (b) "Do Markets UnderpriceNatural Resouce Commodities?"

Piritta Sorsa, "The Environment- A New Challengeto GATI? Sheila Webb and Associates,"WaterborneDiseases in Peru"

Backgroundpapers in the World Bank's DiscussionPaper series include:

SheltonH. Davis, "IndigenousViews of Land and the Environment" John B. Homer, "Natural Gas in Developing Countries: Evaluating the Benefits to the

Environment"

StephenMink, "Poverty,Populationand the Environment"

Theodore Panayotou, "Policy Optionsfor ControllingUrban and IndustrialPollution"

Other (unpublished)papersin theseries are availabledirect from theWorld DevelopmentReport Office, room 17-101, extension31393. For a complete list of titles, consultpages 182-3of the World DevelopmentReport. The World DevelopmentReport was prepared by a team led by AndrewSteer; the backgroundpapers were edited by Will Wade-Gery.

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