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The causal impact of economic growth on material use in Europe

Agnolucci, P; Flachenecker, F; Söderberg, M; (2017) The causal impact of economic growth on material use in Europe. Journal of Environmental Economics and Policy 10.1080/21606544.2017.1325780. (In press). Green open access

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Abstract

Several scholars and policy-makers have claimed that Europe, and Western Europe in particular, has managed to ‘decouple’ economic growth from material use. We identify and address one major limitation in the existing literature – failure to take the endogeneity of economic growth into account. Based on a panel data-set of 32 European countries from 2000 to 2014, we estimate the causal impact of gross domestic product (GDP) on domestic material consumption (DMC) applying an instrumental variable approach. We use the number of storm occurrences as an instrument for GDP, which we show is both relevant and valid. Our results provide new evidence that increasing the GDP growth rate causes the DMC growth rate to increase for Western Europe, whereas the effect is insignificant for the Eastern European economies and Europe as a whole. As our results partly question current wisdom on the achievements of ‘decoupling’, especially among European policy-makers, we offer two explanations that are consistent with these results.

Type: Article
Title: The causal impact of economic growth on material use in Europe
Open access status: An open access version is available from UCL Discovery
DOI: 10.1080/21606544.2017.1325780
Publisher version: http://doi.org/10.1080/21606544.2017.1325780
Language: English
Additional information: © 2017 The Author(s). Published by Informa UK Limited, trading as Taylor & Francis Group This is an Open Access article distributed under the terms of the Creative Commons Attribution License (http://creativecommons.org/licenses/by/4.0/), which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Keywords: Decoupling, domestic material consumption, economic growth, instrument, storm
UCL classification: UCL
UCL > Provost and Vice Provost Offices
UCL > Provost and Vice Provost Offices > UCL BEAMS
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment
UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of the Built Environment > Bartlett School Env, Energy and Resources
URI: https://discovery.ucl.ac.uk/id/eprint/10025110
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