Abstract
We have investigated the interactions between economic growth and industrial wastewater discharge from 1978 to 2007 in China’s Hunan Province using co-integration theory and an error-correction model. Two main economic growth indicators and four representative industrial wastewater pollutants were selected to demonstrate the interaction mechanism. We found a long-term equilibrium relationship between economic growth and the discharge of industrial pollutants in wastewater between 1978 and 2007 in Hunan Province. The error-correction mechanism prevented the variable expansion for long-term relationship at quantity and scale, and the size of the error-correction parameters reflected short-term adjustments that deviate from the long-term equilibrium. When economic growth changes within a short term, the discharge of pollutants will constrain growth because the values of the parameters in the short-term equation are smaller than those in the long-term co-integrated regression equation, indicating that a remarkable long-term influence of economic growth on the discharge of industrial wastewater pollutants and that increasing pollutant discharge constrained economic growth. Economic growth is the main driving factor that affects the discharge of industrial wastewater pollutants in Hunan Province. On the other hand, the discharge constrains economic growth by producing external pressure on growth, although this feedback mechanism has a lag effect. Economic growth plays an important role in explaining the predicted decomposition of the variance in the discharge of industrial wastewater pollutants, but this discharge contributes less to predictions of the variations in economic growth.
Highlights
The impact of economic growth on the environment is an emerging and popular issue in resource, environmental, and ecological economics
Resource depletion and pollutant discharge that result from economic growth will inevitably lead to environmental degradation; technological progress, economies of scale, and the increased income that result from economic growth can be used to reduce pollutant discharge and to improve environmental quality
Discovered that the relationship between the total discharge of various environmental pollutants (y) and economic growth (x) takes on the shape of an inverted U-shaped curve. This relationship, which is similar to the relationship between per capita income and the distribution level analyzed by the American economist Kuznets, was named the “environmental Kuznets curve” (EKC) [2]
Summary
The impact of economic growth on the environment is an emerging and popular issue in resource, environmental, and ecological economics. Resource depletion and pollutant discharge that result from economic growth will inevitably lead to environmental degradation; technological progress, economies of scale, and the increased income that result from economic growth can be used to reduce pollutant discharge and to improve environmental quality. Discovered that the relationship between the total discharge of various environmental pollutants (y) and economic growth (x) takes on the shape of an inverted U-shaped curve. This relationship, which is similar to the relationship between per capita income and the distribution level analyzed by the American economist Kuznets, was named the “environmental Kuznets curve” (EKC) [2].
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