Economic Development and Industrial Pollution in the Mediterranean Region: A Panel Data Analysis

Abstract

This paper aims to analyse the determinants of industrial pollution in selected Mediterranean countries. As carbon dioxide (CO2) emerges as the main pollutant in the industrial sector, per capita CO2 emissions from manufacturing industries and construction has been taken as a proxy for industrial pollution. The study uses data from the World Development Indicators for the period 1971-2010. The results from the panel data model estimations indicate the existence of an inverse U-shaped relation between GDP per capita and industrial pollution in selected Mediterranean countries, which validates the Environmental Kuznets Curve hypothesis. In addition, the share of industry, per capita energy use, population density and urbanization are found as significant determinants of industrial emissions in the selected countries.