Are the Economy and the Environment Decoupling? A Comparative International Study, 1960–2005

TLDR

Ecological modernization theory suggests that the environmental harm linked to economic growth diminishes as development progresses, whereas the treadmill of production theory argues that the link remains constant or increases. The study tests these competing propositions by examining how economic development interacts with time to influence carbon dioxide emissions. Cross‑national panel analyses of three CO₂ emission metrics were used to assess the interaction between economic development and time. Results vary across emission measures and between developed and developing countries, providing mixed support for both theories, and the authors recommend incorporating insights on global production organization and trade structure to refine the theories.

Abstract

Ecological modernization theory posits that even though economic development harms the environment, the magnitude of the harmful link decreases over the course of development. In contrast, the treadmill of production theory argues that the strong relationship between environmental harms and economic development will remain constant or possibly increase through time. To evaluate these competing propositions, interactions between economic development and time are used in cross-national panel analyses of three measures of carbon dioxide emissions. The results vary across the three outcomes as well as between developed and less developed countries, providing mixed support for both theoretical perspectives. The authors conclude by discussing how both theories could benefit from engaging contemporary research concerning changes within the transnational organization of production and the structure of international trade and how these global shifts influence environment/economic development relationships.