Exploring the economy – environment relationship in the case of sulphur emissions

This paper explores the relationship between economic development and environmental pollution by using panel data for 97 countries for the period 1950–2003. Various econometric techniques are applied to a sample of European Union (EU) countries and to a full sample including both EU and non-EU countries. For the full sample, cross-country variation in the estimated slopes is observed with extremely heterogeneous parameters, making aggregation not useful. These findings do not hold for the EU countries, implying that policies to control pollution must consider both the specific economic situation and the structure of the industrial and the business sectors of each region.