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Air and water pollution over time and industries with stochastic dominance

Agliardi, Elettra, Pinar, Mehmet, Stengos, Thanasis
Stochastic environmental research and risk assessment 2017 v.31 no.6 pp. 1389-1408
air, air pollution, carbon dioxide, electricity, food industry, greenhouse gas emissions, greenhouse gases, heat production, water pollution
We employ a stochastic dominance (SD) approach to analyze the components that contribute to environmental degradation over time. The variables include countries’ greenhouse gas (GHG) emissions and water pollution. Our approach is based on pair-wise SD tests. First, we study the dynamic progress of each separate variable over time, from 1990 to 2005, within 5-year horizons. Then, pair-wise SD tests are used to study the major industry contributors to the overall GHG emissions and water pollution at any given time, to uncover the industry which contributes the most to total emissions and water pollution. While CO₂ emissions increased in the first-order SD sense over 15 years, water pollution increased in a second-order SD sense. Electricity and heat production were the major contributors to the CO₂ emissions, while the food industry gradually became the major water polluting industry over time.