Second-hand pollution

Luisito Bertinelli and Benteng Zou of the University of Luxembourg working with Eric Strobl of the Ecole Polytechnique in Paris have compared old and new technologies and the pollution they cause in the developing world. The trade in old tools and equipment has to some extent been responsible for growth over the last few years in the developing world. Indeed, a lack of capital has meant that many less developed countries could gain access to technology that would otherwise be unavailable.

The team points out that older technologies are usually more labour intensive because they are less automated and often require more maintenance. More worryingly though, the team's findings suggest that the import of older technologies not only prolongs the period until pollution levels can be decreased but also raises the baseline level of pollution. This point is not lost in the current climate debate where the issue of rising carbon emissions in the developing world is a moot point.

"We set forth to model how the decision to adopt older and dirtier technologies affects the relationship between economic development and pollution," the team says. They have done so using an economic system known as a vintage capital structure, which looks at the various resources and the pollution levels. Unlike other models, their approach considers the decision of when to replace obsolete with newer technologies and how this may affect pollution.

"If one assumes that older technologies are more environmentally unfriendly, then the decision of when to scrap these and what type of technology (i.e., used or new) to adopt [in their place] is likely to be an important determinant of the extent of pollution generation," the team says.

The team argues that the results have important policy implications. Recourse to older technologies may serve short-term economic goals in developing countries but will have longer term consequences, including higher rates of pollution and delays in reaching a sustainable growth phase.

"Pressures put on developing countries in order to reduce their barriers to imports of used goods should thus be balanced against the costs of supplementary pollution that the use of older technology will induce," the team concludes.