Spatiotemporal Autoregressive Models of Country-Level Emission of Transboundary Pollutants

Abstract

Currently, there are a number of environmental issues that are of global concern, such as global warming, acid rain and ozone layer depletion. The resulting damages are not necessarily confined to only the country where the pollutants are emitted. Hence, multiregional and multilateral cooperation is necessary to take measures against them. Empirical studies on emissions of transboundary pollutants have been performed since the 1990s. For instance, Fredriksson and Millimet (2002) presented an empirical study about measures for U.S. states' environmental policies on pollution abatement and control expenditures. They concluded that, with the introduction of relatively stringent regulations, states are forced to spend higher abatement costs owing to improvements by their neighbors. Murdoch et al. (1997) also reported an empirical study looking at specifications on the demand for voluntary emission reductions with a consideration of the spatial dispersion of the pollutants; nitrogen oxides (NOx) and sulphur oxides (SOx). They discussed that the functional forms of the emissions for these two pollutants are different. In this paper, we perform an empirical study to clarify the importance of including time-series and spatial data together in their model and of the interdependency between the air pollutants. We found that current SOx and NOx emissions are related not only emissions from the proceeding year but also by neighboring countries' emissions. Additionally, we determined that a positive correlation exists the SOx and NOx emissions. From this study, we also observed that the interdependency among SOx emissions from different sources becomes smaller each year that passes. Finally, for NOx emissions, we saw that there is a stronger interdependency between the emissions from two countries that are located further apart.