Matthew A. Cole1
Kenichi Shimamoto
Department of Economics,
University of Birmingham, UK
Abstract:
This paper examines and quantifies the complex linkages
between industrial activity, environmental regulations and air pollution. Couched in terms of the demand for, and the supply of,
environmental services we utilize a new dataset of UK industry specific emissions for a variety of pollutants between 1990 and 1998.
Our analysis allows us to investigate the role played by different determinants of emissions intensity. We find pollution intensity
to be a positive function of energy use and physical and human capital intensity. Conversely, we find pollution intensity to be a
negative function of the size of the average firm in an industry, the productivity of an industry and the industry’s expenditure on
capital and research and development. Our results also indicate that regulations, both formal and informal, have been successful in
reducing pollution intensity.
JEL Classification: O13, L60, Q21, Q25, Q28
Key words: UK manufacturing, air pollution, environmental regulations
1 Corresponding author: Dr. Matthew Cole, Department of Economics, University of Birmingham, Edgbaston, Birmingham, B15 2TT, UK. Tel. 44 121 414 6639, Fax. 44 121 414 7377, e-mail: m.a.cole@bham.ac.uk
We thank seminar participants at the EAERE 2004 Conference
in Budapest for helpful comments and gratefully acknowledge the support of ESRC grant number RES-000-22-0016 and Leverhulme
Trust grant number F/00094/AG.