Impact of GDP, Capital and Employment on Waste Generation - The Case of France, Germany and UK Regions

Abstract

An increasing attention is paid to the role of economic growth as well as waste generation due to the harmful environmental and health effects of hazardous waste. It is predominantly argued that economic growth promotes waste and hence worsens already precarious environmental problems. Another experts and scholars contend that the direct link between economic growth and waste emission into economic system-environmental degradation is too simplistic and the causality is indirect, affected by policy and socio-economic context. However, previous related research was limited to the national level, mainly due to the lack of available data. Comparative studies across nations are missing. Therefore, this study aims to overcome this limitation by using regional level data from France, Germany and UK for the years 2000-2013. Using panel cointegration tests, we find that cointegration is present between total waste per capita, GDP per capita, employment rate and gross fixed capital per capita formation. We further investigate both short and long run Granger causal relationships between waste generation and GDP, employment rate likewise gross fixed capital formation. In the short run, there is bidirectional causal relation running from GDP to waste in Germany, whereas bidirectional causality running from GDP and gross capital formation to waste was observed for the UK. For France, causality running only from gross capital formation to waste was found. In the long run, the variables had no impact on waste in France and Germany. Meanwhile, the result provides both unidirectional and bidirectional granger causality running from gross capital formation, GDP and employment to waste in the UK. These differences lead to important policy implications for each of these countries.