Discussion Papers in Economics

Planning Unit, Indian Statistical Institute, Delhi


Inequality and Environmental Policy
E. Somanathan


A positive theory of mitigation of environmental degradation is discussed in order to understand the formation of environmental policy. When an environmental problem is not mitigated, this is because those affected don't know it is happening, cannot locate the cause, don't have the resources to abate the problem if they are its producers, or don't have the political power to influence policy to stop the problem if they are not its producers. The last is related to inequalities in political power and its implications are examined further. These include implications for the spatial spread of unmitigated pollutants produced by the powerful as opposed to the poor, and the implications of political structure for the overall level of pollution. These and related hypotheses are examined with reference to examples, and, where possible, with representative data. It is shown that there is an important sense in which the “Environmental Kuznets Curve” does not exist.