SpringerLink
Log in

Economic Complexity and the Environment: Evidence from Brazil

  • Chapter
  • First Online:
Universities and Sustainable Communities: Meeting the Goals of the Agenda 2030

Part of the book series: World Sustainability Series ((WSUSE))

Abstract

Brazil is a heterogenous country with respect to, among others, economic complexity, economic development and environmental quality. This paper examines the relationship between economic complexity and key environmental variables in Brazil. We deviate from the Environmental Kuznets Curve (EKC) literature by focusing on economic complexity instead of economic development alone to explain cross-section and time-series variation in a range of environmental variables. Our motivation for considering economic complexity as a main explanatory variable lies on the consideration that low economic complexity is associated to products which are peripheral on the product space. These are products which are less connected to other products, limiting the opportunities for other economic activities, and therefore limiting the impact on the environment. As economic complexity increases more opportunities are created, the product space becomes denser, and pollution increases. However, at a high enough level of economic complexity, the structural changes bring knowledge-intensive industries, which demands higher-skilled labour force and wider skills of occupations. At this point, economic complexity is associated to decreasing environmental degradation. Using panel data for Brazil we find that waste generation decreases, but forest fires increase with rising complexity. Complexity is not associated to more deforestation or air pollution.

This is a preview of subscription content, log in via an institution to check access.

Access this chapter

Log in via an institution

Subscribe and save

Springer+ Basic
EUR 32.99 /Month
  • Get 10 units per month
  • Download Article/Chapter or Ebook
  • 1 Unit = 1 Article or 1 Chapter
  • Cancel anytime
Subscribe now

Buy Now

Chapter
GBP 19.95
Price includes VAT (United Kingdom)
  • Available as PDF
  • Read on any device
  • Instant download
  • Own it forever
eBook
GBP 79.50
Price includes VAT (United Kingdom)
  • Available as EPUB and PDF
  • Read on any device
  • Instant download
  • Own it forever
Softcover Book
GBP 99.99
Price includes VAT (United Kingdom)
  • Compact, lightweight edition
  • Dispatched in 3 to 5 business days
  • Free ship** worldwide - see info
Hardcover Book
GBP 129.99
Price includes VAT (United Kingdom)
  • Durable hardcover edition
  • Dispatched in 3 to 5 business days
  • Free ship** worldwide - see info

Tax calculation will be finalised at checkout

Purchases are for personal use only

Institutional subscriptions

Similar content being viewed by others

Notes

  1. 1.

    Poverty headcount ratio at $3.20 a day (2011 PP) (% of population).

  2. 2.

    More precisely, the ECI is calculated as the average complexity of products exported by a specific economy with international comparative advantage, weighted with the share of exports by the said economy.

  3. 3.

    Aguiar et al. (2007) state that 70% of the total deforested area in the Amazon Basin is destined for cattle production. 13 and three per cent were transformed into temporary and permanent harvests, respectively.

  4. 4.

    Oliveira et al. (2011) and Teixeira et al. (2012) add harvested area for the aforementioned agricultural products (in hectares) and cattle units per square kilometre as control variables. IPEA provides data on harvested area by agricultural products, but the panels are rather incomplete and lead to a drop in the number of observations when employed.

References

  • Aguiar APD, Câmara G, Escada MIS (2007) Spatial statistical analysis of land-use determinants in the Brazilian Amazonia: exploring intra-regional heterogeneity. Ecol Model 209(2):169–188

    Article  Google Scholar 

  • Al-Mulali U, Saboori B, Ozturk I (2015) Investigating the environmental kuznets curve hypothesis in Vietnam. Energy Policy 76:123–131

    Article  Google Scholar 

  • Antweiler W, Brian CR, Scott T (2001) Is free trade good for the environment? Am Econ Rev 91:877–908

    Article  Google Scholar 

  • Arrow K, Bolin B, Costanza R, Dasgupta P, Folke C, Helling CS, Jansson B-O, Levin S, Mailer K-G, Perrings C, Pimental D (1995) Economic growth, carrying capacity, and the environment. Science 268:520–521

    Article  CAS  Google Scholar 

  • Brown JC, Koeppe M, Coles B, Price KP (2005) Soybean production and conversion of tropical forest in the Brazilian Amazon: The case of Vilhena, Rondonia. AMBIO J Hum Environ 34(6):462–469

    Article  Google Scholar 

  • Castilho M, Menéndez M, Sztulman A (2012) Trade liberalization, inequality, and poverty in brazilian states. World Dev 40(4):821–835

    Article  Google Scholar 

  • Cole MA, Elliott RJR (2003) Determining the trade–environment composition effect: the role of capital, labor and environmental regulations. J Environ Econ Manage 46(3):363–383

    Article  Google Scholar 

  • Colusso MVDS, Parré JL, Almeida ES (2015) Degradação ambiental e crescimento econômico: A curva de Kuznets ambiental para o cerrado. Revista de Economia e Agronegócio–REA 10(3)

    Google Scholar 

  • Dasgupta P, Laplante B, Wang H, Wheeler D (2002) Confronting the environmental Kuznets curve. J Econ Perspect 16(1):147–168

    Article  Google Scholar 

  • Fodha M, Zaghdoud O (2010) Economic growth and pollutant emissions in Tunisia: an empirical analysis of the environmental Kuznets curve. Energy Policy 38(2):1150–1156

    Article  CAS  Google Scholar 

  • Fosten J, Morley B, Taylor T (2012) Dynamic misspecification in the environmental Kuznets curve: evidence from CO2 and SO2 emissions in the United Kingdom. Ecol Econ 76:25–33

    Article  Google Scholar 

  • Goldenberg S, Roberts D (2015) Brazil announces massive reforestation and renewable energy plan with US. Guardian. Retrieved from https://www.theguardian.com/world/2015/jun/30/brazil-us-reforestation-forests-renewable-energy

  • Gomes SC, Braga MJ (2008) Desenvolvimento econômico e desmatamento na Amazônia legal: Uma análise econométrica. Number 103095 in 46th Congress, July 20–23, 2008, Rio Branco, Acre, Brasil. Sociedade Brasileira de Economia, Administração e Sociologia Rural (SOBER)

    Google Scholar 

  • Grossman G, Krueger A (1991) Environmental impacts of a North American free trade agreement. Natl Bur Econ Res (Working Paper 3914)

    Google Scholar 

  • Grossman GM, Krueger AB (1995) Economic growth and the environment. Q J Econ 110(2):353–377

    Article  Google Scholar 

  • Hausmann R, Hidalgo CA, Bustos S, Coscia M, Simoes A, Yildirim MA (2014) The atlas of economic complexity: map** paths to prosperity. MIT Press

    Google Scholar 

  • Hidalgo CA, Hausmann R (2009) The building blocks of economic complexity. Proc Natl Acad Sci 106(26):10570–10575

    Article  CAS  Google Scholar 

  • Holtz-Eakin D, Selden TM (1995) Stoking the fires? CO2 emissions and economic growth. J Public Economics 57(1):85–101

    Article  Google Scholar 

  • IBRD (1992) World Development Report 1992. Development and the environment. Oxford University Press, New York

    Google Scholar 

  • Iwata H, Okada K, Samreth S (2010) Empirical study on the environmental Kuznets curve for CO2 in France: the role of nuclear energy. Energy Policy 38(8):4057–4063

    Article  Google Scholar 

  • Jaffe AB, Newell RG, Stavins RN (2003) Technological change and the environment. Handb Environ Econ 1:461–516

    Article  Google Scholar 

  • Jalil A, Feridun M (2011) The impact of growth, energy and financial development on the environment in china: a cointegration analysis. Energy Econ 33(2):284–291

    Article  Google Scholar 

  • Jalil A, Mahmud SF (2009) Environment Kuznets curve for CO2 emissions: a cointegration analysis for china. Energy Policy 37(12):5167–5172

    Article  Google Scholar 

  • Liu M, Huang Y, ** Z, Ma Z, Liu X, Zhang B, Liu Y, Yu Y, Wang J, Bi J, Kinney PL (2017) The nexus between urbanization and PM2.5 related mortality in China. Environ Pollut 15–23

    Article  CAS  Google Scholar 

  • Lo VI, Hiscock M (2014) The rise of the BRICS in the global political economy: changing paradigms? Edward Elgar Publishing

    Google Scholar 

  • Managi S, Jena PR (2008) Environmental productivity and Kuznets curve in India. Ecol Econ 65(2):432–440

    Article  Google Scholar 

  • Margulis S (2003) Causas do desmatamento da Amazônia Brasileira, 1a edição. Banco Mundial. Brasília, 100p

    Google Scholar 

  • Mazzetti C (2016) 5 alarming facts about Amazon forest fires. Greenpeace International. Retrieved from http://www.greenpeace.org/international/en/news/Blogs/makingwaves/5-alarming-facts-about-amazon-forest-fires-deforestation/blog/57406/

  • Mills JH, Waite TA (2009) Economic prosperity, biodiversity conservation, and the environmental Kuznets curve. Ecol Econ 68(7):2087–2095

    Article  Google Scholar 

  • Miragaya J (2008) Demanda mundial de carne bovina tem provocado o desmatamento na Amazônia. T&C Amazônia, ano VI(14)

    Google Scholar 

  • Nasir M, Rehman FU (2011) Environmental Kuznets curve for carbon emissions in Pakistan: an empirical investigation. Energy Policy 39(3):1857–1864

    Article  CAS  Google Scholar 

  • Observatory of Economic Complexity (2017) Brazil economic complexity ranking. Retrieved from http://atlas.media.mit.edu/en/profile/country/bra/#Economic_Complexity_Ranking

  • Oliveira RC, Almeida E, Freguglia RS, Barreto RCS (2011) Desmatamento e crescimento econômico no Brasil: Uma análise da curva de Kuznets ambiental para a Amazônia legal. Rev Economia Sociologia Rural 49(3):709–739

    Article  Google Scholar 

  • Panayotou T (1993) Empirical tests and policy analysis of environmental degradation at different stages of economic development. International Labour Organization (292778)

    Google Scholar 

  • Perman R, Stern DI (2003) Evidence from panel unit root and cointegration tests that the environmental Kuznets curve does not exist. Aust J Agric Resour Econ 47(3):325–347

    Article  Google Scholar 

  • Saboori B, Sulaiman J (2013) Environmental degradation, economic growth and energy consumption: evidence of the environmental Kuznets curve in Malaysia. Energy Policy 60:892–905

    Article  Google Scholar 

  • Santos RBN, Diniz MB, Diniz MJT, Rivero SLM, Oliveira Jr JN (2008) Estimativa da curva de Kuznets ambiental para a Amazônia legal. Number 113968 in 46th Congress, July 20–23, 2008, Rio Branco, Acre, Brasil. Sociedade Brasileira de Economia, Administração e Sociologia Rural, SOBER

    Google Scholar 

  • Selden TM, Song D (1994) Environmental quality and development: Is there a Kuznets curve for air pollution? J Environ Econ Manage 27:147–162

    Article  Google Scholar 

  • Shafik N, Bandyopadhyay S (1992) Economic growth and environmental quality: time series and crosscountry evidence. In Background paper for the World Development Report 1992. The World Bank, Washington DC

    Google Scholar 

  • Sousa AG, Araujo AA, Santos RBND, Santos FTPD, Diniz MB (2008) Sustentabilidade e meio ambiente no Brasil: Uma análise a partir da curva de Kuznets. Number 113968 in 46th Congress, July 20–23, 2008, Rio Branco, Acre, Brasil. Sociedade Brasileira de Economia, Administração e Sociologia Rural, SOBER

    Google Scholar 

  • Stern DI (2002) Explaining changes in global sulfur emissions: An econometric decomposition approach. Ecol Econ 42:201–220

    Article  Google Scholar 

  • Stern DI (2004) The rise and fall of the environmental Kuznets curve. World Dev 32(8):1419–1439

    Article  Google Scholar 

  • Stern DI (2017) The environmental Kuznets curve after 25 years. J Bioecon 19:7–28

    Article  Google Scholar 

  • Stern DI, Common MS (2001) Is there an environmental Kuznets curve for Sulfur? J Environ Econ Manage 41(2):162–178

    Article  Google Scholar 

  • Stern DI, Common MS, Barbier EB (1996) Economic growth and environmental degradation: the environmental Kuznets curve and sustainable development. World Dev 24(7):1151–1160

    Article  Google Scholar 

  • Suri V, Chapman D (1998) Economic growth, trade and the energy: implications for the environmental Kuznets curve. Ecol Econ 25:195–208

    Article  Google Scholar 

  • Tao S, Zheng T, Lianjun T (2008) An empirical test of the environmental Kuznets curve in china: a panel cointegration approach. China Econ Rev 19(3):381–392

    Article  Google Scholar 

  • Teixeira RFAP, Bertella MA, Almeida LTD (2012) Curva de Kuznets ambiental para o estado de Mato Grosso. Análise Econômica 313–337

    Google Scholar 

  • United Nations (2015) Transforming our world: the 2030 agenda for sustainable development, 70th Session, UN Doc, A/Res/70/1

    Google Scholar 

  • Vera-Diaz MC, Kaufmann RK, Nepstad DC, Schlesinger P (2008) An interdisciplinary model of soybean yield in the Amazon Basin: the climatic, edaphic, and economic determinants. Ecol Econ 65(2):420–431

    Article  Google Scholar 

  • Watts J (2012) Brazil’s Amazon rangers battle farmers’ burning business logic. Guardian. Retrieved from https://www.theguardian.com/environment/2012/nov/14/brazil-amazon-rangers-farmers-burning

  • World Bank (2017) Urban population, percentage of total. Retrieved from http://data.worldbankorg/indicator/SP.URB.TOTL.IN.ZS?locations=BR

Download references

Author information

Authors and Affiliations

  1. Utrecht School of Economics, Utrecht University, Kriekenpitplein 21-22, 3584 EC, Utrecht, The Netherlands

    Julia Swart & Lisa Brinkmann

Authors
  1. Julia Swart
    View author publications

    You can also search for this author in PubMed Google Scholar

  2. Lisa Brinkmann
    View author publications

    You can also search for this author in PubMed Google Scholar

Corresponding author

Correspondence to Julia Swart .

Editor information

Editors and Affiliations

  1. European School of Sustainability Science and Research, HAW Hamburg, Hamburg, Germany

    Walter Leal Filho

  2. Business School, Pontificia Universidade Católica do Paraná (PUCPR), Curitiba, Paraná, Brazil

    Ubiratã Tortato

  3. Business School, Pontificia Universidade Católica do Paraná (PUCPR), Curitiba, Paraná, Brazil

    Fernanda Frankenberger

Appendix

Appendix

1.1 Data Sources

Table 8 contains the sources of all the data employed in our study. This includes both data of variables included in the regressions, and data of variables used to construct or transform variables that could not be found in the necessary disaggregation level. The variables are listed in alphabetical order.

Table 8 Data sources
Full size table

1.2 Descriptive Statistics

Tables 9, 10, 11 and 12 provide descriptive statistics for our five panels. Since we find robust evidence for inverted U-shaped relationships between income per capita and solid waste generation, deforestation and forest fires in Sect. 4, the statistics on income per capita are needed to determine whether the turning points of the EKCs lie within the range.

Table 9 Descriptive statistics
Full size table
Table 10 Descriptive statistics
Full size table
Table 11 Descriptive statistics
Full size table
Table 12 Descriptive statistics
Full size table

Rights and permissions

Reprints and permissions

Copyright information

© 2020 Springer Nature Switzerland AG

About this chapter

Check for updates. Verify currency and authenticity via CrossMark

Cite this chapter

Swart, J., Brinkmann, L. (2020). Economic Complexity and the Environment: Evidence from Brazil. In: Leal Filho, W., Tortato, U., Frankenberger, F. (eds) Universities and Sustainable Communities: Meeting the Goals of the Agenda 2030. World Sustainability Series. Springer, Cham. https://doi.org/10.1007/978-3-030-30306-8_1

Download citation

Publish with us

Policies and ethics

Search

Navigation