The Poor Urge Their Governments To Hug Fewer Trees

There's nothing like environmental research done by sociologists or economists to offer a challenge with narrative meaning. Here's one news reporter's take on some extremely interesting work by two University or Rochester, NY investigators:- "Research has shown that in countries with a wide disparity between rich and poor, environmental protection tends to be a lower priority. The inverse also is true: Countries with greater economic equality assign higher priority to safeguarding their environment. The main determining factor seems to be that lower-income people tend to vote against spending tax dollars on what are deemed costly or discretionary environmental projects. In countries with less disparity between rich and poor, such as throughout Scandinavia, environmental protection is assigned a higher priority and governments have enacted more stringent regulations and policies accordingly."

University of Rochester researchers Laura Marsiliani and Thomas Renstrom reviewed hundreds of academic studies of linkages between economic equality and environmental protection and found plenty of evidence to suggest that "poorer individuals tend to prefer less stringent environmental policy."

Or, maybe just Swedish cultural tradition does the job? Anyhow, have a look below the fold for the abstract of the actual work: Environmental Policy & Capital Movements: The Role Of Government Commitment. Now tell us: if you'd seen only the formal abstract, would you have taken the same impression of what the research meant? This work got us thinking, anyhow, about the recent controversy over 'why the environmental movement is dead.' ENVIRONMENTAL POLICY AND CAPITAL MOVEMENTS: THE ROLE OF GOVERNMENT COMMITMENT

Laura Marsiliani
Thomas I. Renström

This paper explores the relationship between environmental protection and international capital movements, when tax policy is endogenous (through voting). A two-period general equilibrium model of a small open economy is specified to compare the effects of two different constitutions (commitment or no commitment in tax policy), as well as income inequality. Under the commitment regime, the equilibrium is characterized by a lower labor tax, higher environmental tax and less capital moving abroad than in the no-commitment equilibrium. Furthermore, given the degree of commitment, more equal societies are characterized by tougher environmental policy and less capital moving abroad.

Keywords: Environmental policy, international capital movements, time consistency, inequality, political economy, human capital.

JEL classification: F20, H21, H23.

Correspondence to:
L. Marsiliani, Department of Economics and Finance, University of Durham, 23-26 Old Elvet, Durham, DH1 3HY,
UK. Tel: +44-(0)191-334 6363. Fax: +44-(0)191-334 6341.
Email: Web:

T.I. Renström, Department of Economics and Finance, University of Durham, 23-26 Old Elvet, Durham, DH1 3HY,
UK. Tel: +44-(0)191-334 6369. Fax: +44-(0)191-334 6341.
Email: Web:

Earlier version of full paper as pdf document here.

Via:: The Arizona Republic, Earthtalk Image credit:: People's Web, Navtej Kohli

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