Is waste generation de-linking from economic growth? Empirical evidence for Europe

Abstract

The article provides empirical evidence on the de-linking of waste generation from economic growth. The data used refer to the European countries. An investigation carried out into packaging and municipal waste indicators shows that any de-coupling which has eventually taken place has been of a relative nature. Estimated waste elasticities with respect to income highlight that a hypothetical turning point, that would eventually characterize a Kuznets curve for waste, is far from being reached. Europe thus appears to be lagging behind in the effort to invert the relationship between waste and income/consumption indicators. The lack of policy targets in reference to waste prevention at source, in addition to recovery/recycling goals, may be considered as a primary policy-related reason behind the absence of a stronger de-linking process for waste in Europe. The applied panel investigation, though informative since it refers to a homogenous regional area, reveals the need for further work, exploring de-linking processes that focus on specific materials and/or countries.

Notes

¹They use municipal waste data for the period 1975–1990 in 13 OECD countries, finding no turning point, with environmental indicators (per capita municipal waste) monotonically increasing with income over the observed range.

²A note on data sources: for municipal waste data derive from EUROSTAT/OECD joint questionnaire, national sources, EEA; reliability is not homogenous across countries. For packaging, member states report in pursuance of Directive 94/62/EC on packaging and packaging waste to the DG environment. For an assessment on waste data issues and methodology see Eurostat (2001).

³Shobee (2004) suggests a third order polynomial specification as more realistic relationship between environmental degradation and income per capita. This supports the credence of a logistic shape, wherein environmental degradation first accelerates, then decelerates and finally falls. Marginal environmental degradation is thus not modelled as constant. The issue still remains highly unresolved, with the EKC hypothesis relying mainly on empirical evidence. The theoretical foundations of the EKC are still not extensively formalised, though some contributions have emerged (Andreoni and Levinson, 2001).

⁴The need of further investigation using larger and, more important, longer data sets, is confirmed by a final applied exercise, carried out after dropping off two small ‘outliers’ countries like Malta and Iceland, thus reducing the sample to 16 countries. The two-terms nonlinear regression shows significant terms, with expected signs, in the random effect model: the estimated turning point is around the per capita consumption of a country like Greece, though we must remember that for municipal waste Hausman statistics favour the fixed effect model. Nevertheless, this outcome remains important since the EKC nonstability concerning results when different factors change is a key issue we have to deal with and has been raised in the literature. It necessarily opens the way to more detailed analyses at country level using specific material and regional-based datasets.