How important is geography for sustainable development?

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Eva Gossiaux (Master APE)

The mutual relationship between economic activities and environmental degradation has been an important research topic in the economic literature. Yet, geographic patterns of pollution exposure and their evolution through time remain poorly addressed questions, as existing works generally focus on the temporal dynamics of ecological-economic systems. However, the spatial dimension is essential to realistically describe many environmental problems where issues like pollution arise in specific locations and are transported across space due to natural processes. Although it spares several mathematical challenges, overlooking these transport effects may lead to inaccurate prospects for sustainability.

In this Master’s thesis, Eva Gossiaux proposes a flexible benchmark framework to study a spatial economy in a two-dimensional region, in a combination of theoretical and numerical developments. Focusing on the impact of industrial pollution, the model aims to shed some light on the role of geography in the joint spatio-temporal evolution of production and health. The detailed modeling of the pollution transport process through air, soil or water, expands existing approaches to account for the properties of the environment at study and allow the application of the model to real world contexts, which is one of the strong originalities of this work.

In a first step, the author provides conditions guaranteeing the existence and the uniqueness of a sustainable development path for the modeled economy, meaning that production, pollution and health stabilize at positive long run levels, that are spatially heterogeneous but do not depend on initial disparities. The ambiguous influence of spatial features, like the distance between residential and industrial areas or the concentration of the productive activity, is explored in simulations. Results are then illustrated in three realistic geographical settings. First, a “core-periphery” structure is investigated, showing that the model can capture meaningful insights about the dynamics of spatial inequalities. The model is then solved for the metropolitan area of Grenoble, emphasizing the role of natural geographical features, like high mountain ranges preventing the dispersion of pollution. Lastly, Gossiaux studies an upstream pollution problem in India. The discussion of a pipeline project diverting industrial effluents down the river demonstrates how the model can be used to study public policies.

In a second step, Gossiaux introduces the problem of a policy maker who wants to optimally divide revenues between consumption and pollution abatement to maximize individuals’ welfare. The existence of a stationary solution, and even more its uniqueness, can no longer be ensured. Solving numerically for the optimal policy in the same case studies, Gossiaux finds that the policymaker initially implements intensive environmental efforts, primarily in populated areas but not exclusively. Abatement expenses then gradually decrease over time, until the economy reaches a stable situation in which a significant portion of the total revenue from production is continually allocated to abatement.

Overall, highly polluted economies invest less in abatement, in relative and absolute terms, because of lower production revenues and lower marginal benefits from pollution reduction. Within each region, the health gains associated to optimally planned policies always accrue to some areas more than others, depending on local pollution levels and on the interconnection of locations as ruled by the transport process.

All in all, these examples come together to show how geography matters for the sustainable development issue and suggest that spatially dependent policies are essential to achieve global environmental objectives.

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References

Master’s thesis title: Geography matters: A model of production, pollution and health over Space and Time

Supervised by: Katheline Schubert (PSE, UP1) and Carmen Camacho (PSE, CNRS, UP1)

Available at: https://dumas.ccsd.cnrs.fr/MEM-PSE/dumas-03461129

Contact: eva.gossiaux at psemail.eu - LinkedIn Profile

Visual Credit : Jacob_09 - shutterstock