An economic analysis of Midwestern US criteria pollutant emissions trends from 1970 to 2000

From 1970 to 2000, U.S. economic output doubled but emissions of four criteria pollutants from economic activity-CO, NOx, VOC, and SO2-decreased by 20%. Understanding what factors have contributed to this pollution reduction in the U.S. as a whole, as well as in various regions within the country, has important policy implications. A recently developed regional environmental-econometric input-output model for the Midwestern states of the U.S. has been used to examine the causes of pollution reduction in this regional economy over a thirty-year period. Simulations conducted with this model suggest that, for the rate of growth experienced over the period, technological improvement has dominated economic structural change in the reduction of pollutant emissions. On average, technological improvement has accounted for approximately 80% of emissions reduction, while economic structural change explains the remaining 20% of the decrease. Our analysis suggests that, while much remains to be done in reducing emissions in both developed and developing countries, policies that are informed by an understanding of the role of structural change and which promote the adoption of more recently developed technologies may contribute substantially to sustainable development.