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Int. j. econ. manag. soc. sci., Vol(5), No (2), June, 2016. pp.

12-22

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International Journal of Economy, Management and Social Sciences


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ISSN:
2306-7276

Copyright 2016. All rights reserved for TI Journals.

The Impact of Economic Growth and Trade on the Environment:


the Canadian Case
Olaide Kayode Emmanuel *
Memorial University Of Newfoundland, Canada
(Environmental Economics (Econ6022) Project, April, 2015, Student #: 201398088)
*Corresponding author: keo505@mun.ca

Keywords

Abstract

Economic growth
Trade
EKC
ARDL
VECM
Environmental degradation

There is often the presumption that economic growth and trade liberalization are good for the
environment. However, the risk is that policy reforms designed to promote growth and trade
liberalization may be encouraged with little consideration of the environmental consequences (Arrow et
al., 1995). All economic activity occurs in the natural, physical world. It requires resources such as
energy, materials and land. Also, economic activity invariably generates material residuals, which enter
the environment as waste or polluting emissions. The Earth, being a finite planet, has a limited
capability to supply resources and to absorb pollution. Hence, There is growing recognition that gross
domestic product (GDP) produced at the expense of the global environment, and at the expense of
scarce and finite physical resources, overstates the net contribution of that economic growth to a
countrys prosperity. Using mainly four environmental indicators of air pollution (greenhouse gas,
carbon dioxide, nitrogen oxide and Sulphur oxide), this paper provides an empirical analysis of the
verification of the EKC within the Canadian context, and the causal relationship between economic
growth and trade and environmental degradation from the Canadian perspective. The study reveals that
the traditional EKC does not hold for Canada, for these indicators of environmental degradation. It also,
shows that a long run relationship and a bidirectional Granger-causality exist between economic growth
and trade, and these indicators.

1.

Introduction

There is often the presumption that economic growth and trade liberalization are good for the environment. However, the risk is that policy
reforms designed to promote growth and trade liberalization may be encouraged with little consideration of the environmental consequences
(Arrow et al., 1995). All economic activity occurs in the natural, physical world. It requires resources such as energy, materials and land. Also,
economic activity invariably generates material residuals, which enter the environment as waste or polluting emissions. The Earth, being a finite
planet, has a limited capability to supply resources and to absorb pollution. Hence, There is growing recognition that gross domestic product
(GDP) produced at the expense of the global environment, and at the expense of scarce and finite physical resources, overstates the net
contribution of that economic growth to a countrys prosperity.
The early stages of the environmental movement began with some scientists questioning how natural resource availability could be compatible
with sustained economic growth (Meadows et al., 1972). Neoclassical economists, however, fiercely defended that limits to growth due to
resource constraints were not a problem (e.g. Beckerman, 1974). This marks the beginning of the debate between the so-called environmental
pessimists and optimists. This debate which still continues till date is centered on nonrenewable resource availability. However, in the 1980s
large issues such as ozone layer depletion, global warming and biodiversity loss began to change the main focus of the debate to the impacts of
environmental degradation on economic growth. Hence, interest was shifting away from natural resource availability towards the environment as
a medium for assimilating wastes (i.e. from source to sink) (Neumayer, 2003). Also, following the Brundtland Report (WCED, 1987), the
discourse of sustainable development largely embraced the economic growth logic as a way out of poverty, social depravation and also
environmental degradation particularly for the developing world. As such, the relationship between economic growth and trade liberalization,
and the environment came under increased scrutiny.
The empirical literature on the link between economic growth and environmental pollution literally exploded in the 1990s (Stern, 2003; 2004).
Much of this literature sought to test the Environmental Kuznets Curve (EKC) hypothesis. The environmental Kuznets curve is a hypothesized
relationship between various indicators of environmental degradation and income per capita (Stern, 2003). The EKC posits that in the early
stages of economic development environmental degradation and pollution will increase until a certain level of income is reached (called the
turning point) and then environmental improvement will occur. Several possible reasons for this hypothesized relationship has been put forward:
the income elasticity of demand for environmental quality may exceed one, so that as income rises citizens support initiatives and policy
propositions to reduce environmental degradation; rising incomes may be associated with shifts from resource-intensive to research-intensive
output in the economy; and rising incomes together with improvements in technology and human capital may help decouple economic growth
and environmental degradation. The turning points vary for different indicators of environmental degradation. This relationship between per
capita income and pollution is often shown as an inverted U-shaped curve. Hence, the curve is named after Simon Kuznets (1955) who
hypothesized that as per capita income increases, economic inequality increases over time and then after some turning point starts declining. In
the early 1990s the EKC was introduced and popularized with the publication of Grossman and Kruegers (1991) work on the potential
environmental impacts of a North American Free Trade Agreement (NAFTA), and the 1992 World Bank Report (Shafik and Bandyopadhyay,
1992; World Bank, 1992). These studies have, however, being criticized for a variety of reasons (Stern, 2003, 2004). One of these reasons is
that,
most of the empirical studies concentrated on few pollutants, and this may lead to the incorrect interpretation that all other pollutants
have the same relation to income. Also, the relationship between the environment and income growth might vary with the source of income
growth, since different types of economic activities have different pollution intensities. One implication of this is that the pollution consequences

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The Impact of Economic Growth and Trade on the Environment: the Canadian Case
International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

of economic growth are dependent on the underlying source of growth (Antweiler et al. 2001). It was also demonstrated that methodological
choices can significantly influence the results (Cavlovic et al. 2000). It has also been argued by several researchers that the simplest form of the
EKC does not account for trade patterns (Suri and Chapman, 1998; Antweiler et al., 2001; Cole, 2004). Specifically, they indicate that trade
patterns may partially explain a reduction in pollution in high income countries, but with the reverse in low income countries. Hence, trade as a
driver of economic growth has also been seen to impact greatly on the environment. In particular, two major hypotheses have been used in the
literature, to link trade with the environment; these are the Pollution Haven Hypothesis (PHH) and the Factor Endowment Hypothesis (FEH).
The PHH argues that less stringent environmental regulations in developing countries will provide them with a comparative advantage in the
production of pollution-intensive goods over developed countries (Cole, 2004). The FEH on the other hand, argues that factor abundance and
technology determine trade and specialization patterns, and that such countries relatively abundant in factors used intensively in polluting
industries will on average get dirtier as trade liberalizes and vice versa (Mani and Wheeler, 1998).
Using mainly four environmental indicators of air pollution (greenhouse gas, carbon dioxide, nitrogen oxide and Sulphur oxide), this paper
provides an empirical analysis of the verification of the EKC within the Canadian context, and the causal relationship between economic growth
and trade and environmental degradation from the Canadian perspective. The rest of this paper is structured as follow: section II briefly discusses
the Canadian environmental policies and progress experience; section III looks at the review of literatures on the economic growth and trade, and
environment nexus; section IV focuses on the description of the data and the methodology used; section V presents the empirical analysis of the
results; section VI provides conclusions about the study and its implications.

2.

The Canadian environment policies and progress

Canada has over the past few years taken some actions, enact and implement some policies aiming at improving the quality of the environment,
not only within its geographical jurisdiction, but also globally. Canada ratified the United Nations Framework Convention on Climate Change
(UNFCCC) in December 1992, under which it committed stabilizing, greenhouse gas (GHG) emissions at 1990 levels by 2000; and the
Convention came into force in March 1994. However, in 2000, Canadas absolute GHG emissions were 22% higher than they had been 10 years
earlier (Environment Canada, 2014). Canada went to ratify the Kyoto Protocol in 2002, pledging to reduce GHG emissions to 6% below 1990
levels between 2008 and 2012. As of 2010, however, absolute GHG emissions remained 17% above 1990 levels. At the 15th session of the
Conference of the Parties (COP15) to the UNFCCC in 2009, Canada signed the Copenhagen Accord, under which Canada has committed to
reducing its GHG emissions to 17% below the 2005 level by the year 2020. Canadas National Inventory is prepared and submitted annually to
the UNFCCC by April 15 of each year, in accordance with the December 2005 version of the Guidelines for the preparation of national
communications by Parties included in Annex I to the Convention, Part I: UNFCCC reporting guidelines for national inventories (Environment
Canada 2014). Canada has also ratified the United Nations Convention on Long-range Transboundary Air Pollution (LRTAP Convention),
which has three international protocols to reduce Sulphur dioxide emissions. The first, the 1985 Sulphur Protocol, adopted a flat rate target to
reduce national annual Sulphur emissions by at least 30 percent between 1980 and 1993. The next two, the 1994 Sulphur Protocol and the 1999
Gothenburg Protocol to abate Acidification, Eutrophication and Ground-level Ozone, are based on effects. They aim to reduce Sulphur
emissions where environmental effects are more severe. The 1985 Sulphur Protocol called for Canada to cap national Sulphur dioxide emissions
permanently at 3.2 million tonnes by 1993. Canada met this cap in 1992, with national emissions of 3.1 million tonnes. The 1994 Sulphur
Protocol allows emission reductions to be geographically targeted to achieve maximum environmental benefit. Canada has met all its current
protocol commitments, including capping Sulphur dioxide emissions in the Sulphur oxide management area at 1.75 million tonnes by 2000
(Environment Canada). The 1988 Canadian Environmental Protection Act (revised in 1999 and proclaimed in 2000) has played an important role
in improving waste disposal, and the 1998 Environmental Harmonization Accord set national standards for important air and water pollutants. A
1995 report by the Organization for Economic Cooperation and Development (OECD) provides the first snapshot of Canadian environmental
performance in terms of ecosystems, water, waste, air and public policy (OECD 1995). Hayward and Jones (1998) and Devlin and Grafton
(1999) provide overviews or syntheses of environmental trends over the two decades prior to 2001. Hayward and Jones used 20 separate
measures of environmental degradation in the categories of air quality, water quality, natural resources and solid waste and conclude that overall
environmental quality improved between 1980 and 1995. Devlin and Grafton conclude that in a number of significant areas, particularly air
quality, Canada has improved its environmental quality but important challenges remain. The Conference Board of Canada, a body with an
overarching goal of measuring the quality of life for Canada and its OECDs peer countries, provides an overview of performance and relative
ranking of the environmental performance of Canada and its peer countries in 2014.The Board used fourteen indicators to assess environmental
performance across six dimensions. The indicators used include, Greenhouse gas (GHG) emissions, Nitrogen oxides emissions, Sulphur oxides
emissions, VOC emissions, PM10 concentration, Municipal waste generation, Water Quality Index, Water withdrawals, Threatened species,
Forest cover change, Use of forest resources, Marine Trophic Index, Low emitting electricity production, and Energy intensity; while the
dimensions used include, air quality, waste, water quality and quantity, biodiversity and conservation natural resource management, climate
change and energy efficiency. According to the Board, Canada receives a C grade on environmental performance and ranks 15th out of 17
peer countries. Compared with the 17 country average, Canadas performance is above average on five indicators: use of forest resources low
emitting electricity production, Water Quality Index, threatened species, particulate matter concentration. Canadas performance is below
average on nine indicators: forest cover change nitrogen oxides emissions Sulphur oxides emissions Marine Trophic Index greenhouse gas
(GHG) emissions, water withdrawals volatile organic compound (VOC) emissions Canadas success in improving its environmental
performance has been mixed. It has improved air quality, reduced its energy intensity, and increased the growth of forest resources relative to
forest harvest, municipal waste generation and energy intensity. Although Canada ranks below the best performing
Country on all of the environmental indicators, it does earn A grades for four indicators: Water Quality Index, threatened species, use of forest
resources, and low emitting electricity production. It earns a B for Sulphur oxide emissions, forest cover, and PM10 concentration; and
receives a C grade on water withdrawals. Canada receives D grades on six indicators: nitrogen oxides emissions, VOC emissions, municipal
waste generation, Marine Trophic Index, GHG emissions, and energy intensity But Canada must do more to lower greenhouse gas emissions, to
use its freshwater resources more wisely, and to reduce waste. Canada ranks 15th out of 17 countries for greenhouse gas (GHG) emissions per
capita. Canadas per capita GHG emissions decreased by nearly 5 per cent between 1990 and 2010, while total GHG emissions in Canada grew
17 per cent. The largest contributor to Canadas GHG emissions is the energy sector, which includes power generation (heat and electricity),

Kayode Emmanuel Olaide *

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International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

transportation, and fugitive sources. Canada ranks 16th out of 17 peer countries. Canadas per capita nitrogen oxides emissions have been
decreasing since 1990. Canada needs to do more to reduce emissions from the transportation, electricity, and industrial sectors. Canada ranks
16th out of 17 countries. Canadas per capita Sulphur oxides emissions are nearly 17 times that of the best performer, Switzerland. Canadas
Sulphur oxides emissions decreased between 1990 and 2005. The board maintained that, to improve its overall performance, Canada must
promote economic growth without further degrading the environment, partly by encouraging more sustainable consumption.

3.

Literature review on economic growth, trade and environment nexus

Examination of the empirical relationship between national income and measures of environmental quality began with Grossman and Kruegers
(1991) paper on the potential impacts of NAFTA. There, they estimated reduced-form regression models relating three indicators of urban air
pollution to characteristics of the site and city where pollution was being monitored and to the national income of the country in which the city
was located. This was when the EKC concept emerged. However, a 1992 World Bank Development Report (Shafik and Bandyopadhyay, 1992;
World Bank, 1992) made the notion of the EKC popular by suggesting that environmental degradation can be slowed by policies that protect the
environment and promote economic development. Panayotou (1993), who actually coined the curve EKC, suggested the addition of other
explanatory variables, and estimated the EKC for 55 developed and developing countries using a panel data regression. Selden and Song (1994)
estimated the EKCs for four emission series using longitudinal data from World Resources (WRI, 1991). The data used are primarily for
developed countries, and the study showed that the turning point for emissions was likely to be higher than that for ambient concentrations. The
reason for this being that urban and industrial development tends to be more concentrated in a smaller number of cities, at the early stage of
economic development, and these cities will also have rising central population densities. The trend will be reversed in the later stages of
development; hence, it is possible for peak ambient pollution concentration to fall as income rises even if total national emissions are rising
(Stern et al., 1996). Grossman and Krueger (1995) identify three different channels through which economic growth can affect the quality of the
environment that shape the EKC: the scale effect, the increase in pollution when the economy grows, the composition, and the technique effect.
The composition effect in this context refers to structural changes that occur in the economy, leading to different environmental pressures in the
long-term. Furthermore it is assumed that the dominant role is played by public pressure towards more governmental regulation and the use of
cleaner production techniques by firms (technique effect). This is based on the assumption that, as income grows income elasticity of the
environmental quality increases. Therefore, after a threshold level of income, wealthier countries tend to be more willing and able to channel
resources into environmental protection and higher environmental standards. Cole et al. (1997) also confirm the existence of the EKC, using
emissions data for the OECD countries. List and Gallet (1999) estimated the EKC for the fifty U.S. states using emissions data for the period
1929 to 1994. Neumayer (2003) posited that rich countries may be better able to meet the higher demands for environmental protection through
their institutional environmental capacity. However, Martinez-Alier (1995), contested whether rich people care more about the environment than
the poor. Beckerman (1992) claimed that there is clear evidence that, although economic growth usually leads to environmental degradation in
the early stages of the process, in the end the best and probably the only way to attain a decent environment in most countries is to become
rich. The notion of the EKC has however, been challenged for some reasons: first, the EKC has never been shown to apply to all pollutants or
environmental impacts alike (Dasgupta et al., 2002; Perman and Stern, 2003); second is the econometric critic of the reduced form model (Day
and Grafton, 2001; Stern, 2003). Delvin and Grafton (1999) showed that there is considerable evidence of environmental degradation in a
number of critical areas, such as species and habitat loss and depletion of natural resources in Canada, despites its wealth. Day and Grafton
(2001) used the cubic specification of the reduced form model, and found out that the EKC does not hold for carbon dioxide emissions;
concentrations of carbon monoxide, nitrogen dioxide, ground level ozone, sulphur dioxide, total particulate matter; concentrations of dioxin in
herring gull eggs in the St. Lawrence river; concentrations of fecal coliform in the Saskatchewan River; and concentrations of dissolved oxygen
in the Saskatchewan and St. Johns Rivers.
Arrow et al. (1995) and Stern et al. (1996) argued that if there was an EKC type relationship, it might be partly or largely a result of the effects of
trade on the distribution of polluting industries. Suri and Chapman (1998) introduced trade explicitly into the EKC model, and consequently,
numerous studies have examined the relationship between trade and environment in the last few years. However, the empirical results reported
from these studies appear to be mixed; the study by Antweiler et al. (2001) shows that trade liberalization reduces pollution, the findings by
Dasgupta et al. (2002) appear to be skeptical about the positive environmental effects of trade liberalization. Furthermore, some studies
(Grossman and Krueger, 1993; Gale and Mendez, 1998) find empirical support in favor of the factor endowment hypothesis (FEH) and against a
significant influence of environmental regulation on trade patterns, while some others find evidence in support of the PHH (Suri and Chapman,
1998; Mani and Wheeler, 1998).

4.

Methodology

The reduced-form specification that is commonly employed in the empirical literature to examine the relationship between environmental
degradation and per capita income in the context of the EKC is given as:

= +

(1)

Where, represents environmental degradation, i.e. the specific pollutant that is used for the estimation,
is income per capita, and
are
other covariates, for example population density, population growth, or income inequality. Trade has occasionally been included as an additional
covariate in the EKC model.
The basic EKC models start from a simple reduced-form quadratic function, whereas most recent studies include the cubic level. The inverted-U
shaped curve derived from such a formula requires to be positive and to be negative, and both statistically significant. However, empirical
results could display several other variants different from the EKC; if is negative and statistically significant but and are statistically
insignificant, then we get pattern downward sloping straight line. These are indicators that show an unambiguous improvement with rising per
capita income, such as access to clean water and adequate sanitation. If is positive and statistically significant, but and are statistically
insignificant, then we get pattern an upward sloping straight line. These are indicators that show an unambiguous deterioration as incomes

15

The Impact of Economic Growth and Trade on the Environment: the Canadian Case
International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

increase. If and are statistically significant, but is positive and is statistically insignificant, then a U shaped curve results. There is
also the possibility of a second turning point in which case, is statistically significant, and multiple turning points could also result, which
may not fit the model. The model could also be estimated in its logarithmic form; this imposes a non-negativity constraint on the values of the
variables. As noted by Stern (2003), economic activity inevitably implies the use of resources and by the laws of thermodynamics, use of
resources inevitably implies the production of waste. Regressions that allow levels of indicators to become zero or negative are inappropriate
except in the case of deforestation where afforestation can occur. This paper estimates the model in a time series form and makes use of both the
quadratic and the cubic specifications; both are estimated in both the level and logarithmic forms.
The paper estimates the co-integration relationship between economic growth, trade and the environmental degradation indicators using the
Autoregressive Distributed Lagged (ARDL) model. In Pesaran et al (2001), the co-integration approach, also known as the bounds testing
method, is used to test the existence of a co-integrated relationship among variables. The procedure involves investigating the existence of a
long-run relationship in the form of an unrestricted error correction model for each variable as follows:
= +

= +

= +

+
+

(2)

(3)

,
,

(4)

The F-tests are used to test the existence of long-run relationships. The F-test used for this procedure, however, has a nonstandard distribution.
Thus, the Pesaran et al (2001) approach computes two sets of critical values for a given significance level. One set assumes that all variables are
I (0) and the other set assumes they are all I (1). If the computed F-statistic exceeds the upper critical bounds value, then the null hypothesis (no
co-integration) is rejected. If the F-statistic falls within the bounds set, then the test becomes inconclusive. If the F-statistic falls below the lower
critical bound value, it implies no co-integration. When a long-run relationship exists, the F-test indicates which variable should be normalized.
The causal relationship between the variables is determined using Vector Error Correction (VEC) model. Following Granger (1988), and Engle
and Granger (1987), the VEC representation is as follow:
= +

= +

= +

,
,

+
+

,
,
,

+
+

,
,

+
+

,
,

(5)

+
+

,
,

(6)
(7)

Where is GDP per capita,


is the environmental degradation indicator,
is trade, p is lag length and is decided according to information
criterion and final prediction error. The parameters , are the co-integrating vectors, derived from the long-run co-integrating relationships
regression, and their coefficients , are the adjustment coefficients. The parameters i, (i=1, 2, 3, 4, 5) are intercepts and the symbol denotes
the difference of the variable following it. Using the model in Equations (57), Granger causality tests between the variables can be investigated
through the following three channels:
(i) The statistical significance of the lagged error-correction terms (ECTs) by applying separate t-tests on the adjustment coefficients. This
shows the existence of a long-run relationship
(ii) A joint F-test or a Wald 2-test applied to the coefficients of each explanatory variable in one equation. For example, to test whether
environmental indicator Granger-causes growth in Eq. (5), we test the following null hypothesis:H : , = , == , 0. This is a
measure of short-run causality;
(iii) A joint F-test or a Wald 2-test applied jointly to the terms in (i) and the terms in (ii)

5.

Empirical results and discussion

5.1. Data and Variable definition


Four environmental degradation indicators are made use of in this empirical work, each of them in per capita (kiloton per capital) and in total
(kiloton) concentrations. The indicators include, Nitrogen oxides emissions, sulphur oxides emissions, greenhouse gases emissions (excluding
land use and land use charge measure and forestry- LULUCF) emissions, and carbon dioxide emissions; the carbon dioxide emissions was also
treated separately after from having been included in the GHG emissions in order to determine its separate impact, since it accounts for over 70
percent of the GHG emissions in Canada for each year under consideration. The data for the variables are taken from the OECD online data
bank. The GDP per capita is measured in the constant US$ with 2005 as the base year. The data for the trade is the sum of the export and import
as a percentage of the GDP. The data for the GDP per capital and the trade are taken from the World Bank online data bank. All data comprise of
data from 1990 to 2012. The variables notations and definitions are as follows:
GDPPK: Per capita real GDP
GHGPK: Per capita greenhouse gas emissions
NOPK: Per capita nitrogen oxides emissions
SOPK: Per capita sulphur oxides emissions
CO2PK: Per capita carbon dioxide emissions
TGHG: Total greenhouse gas emissions
TNO: Total nitrogen oxides emissions
TSO: Total sulphur oxides emissions
TCO2: Total carbon dioxide emissions
TRADE

Kayode Emmanuel Olaide *

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International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

5.2. Test results for unit roots


When working with time series data, the first question to ask is whether or not the series is stationary. A stochastic process is said to be
stationary if its mean and variance are constant over time, and if the covariance exists between the two time periods and not the actual time at
which the covariance is computed. Since, the VEC specification in Equations (5)(7) requires that some or all the variables are integrated of
order one, I herein investigate the stationarity status of the variables using both the augmented DickeyFuller (ADF) and the Dickey-Fuller
Generalized Least Square (DF-GLS) tests for unit roots. The null hypothesis tested is that the variable under investigation has a unit root against
the alternative that it does not (that is, it is stationary). In the ADF, lag-length is chosen using the Akaike Information Criteria (AIC) after testing
for first and higher order serial correlation in the residuals while in the DF-GLS, the optimal lag is determined using Ng-Perron seq t, Schwarz
Criteria (SC) and AIC. Table 1 reports the results of testing for unit roots in the level variables as well as in their first difference. The table
shows the estimated t- statistics. Based on the ADF test, only NOPK and LNNOPK are stationary in their level; CO2PK, GDPPK, TCO2,
LNCO2PK, LNGDPPK, and LNTCO2 are stationary in their first difference, while others are stationary in their second difference. Based on the
DFGLS, GDPPK and LNGDPPK are stationary in their level; GHGPK, NOPK, TGHG, TNO, LNGHGPK, LNNOPK, LNTGHG and LNTNO
are stationary in their first difference, while others are stationary in their second difference.

5.3. EKC analysis


Figure1 (a-f) and Table2 (a-f) shows the result for the EKC analysis. The graphical analysis shows that none of the environmental degradation
indicators considered follows the traditional inverted U EKC curve pattern, both in their levels and their logarithmic form. In the quadratic
specification of the model, the coefficients on GDPPK and GDPPKSQ in the regressions with GHGPK, NOPK, SOPK, TGHG, TNO, and TSO
as the dependent variable, though have the predicted EKC signs, are however, not statistically significant at the 5% level of significance. The
coefficients are neither statistically significant nor have the predicted EKC signs when CO2PK and TCO2PK are the dependent variables. The
coefficient on TRADE is only statistically significant with GHGPK, TGHG and TCO2 as the dependent variable. Trade is positively related to
each of these indicators, suggesting that an increase in trade leads to an increase in them. Also in the logarithmic form, the coefficients on
LNGDPPK and LNGDPPKSQ in the regressions with LNGHGPK, LNNOPK, LNSOPK, LNTGHG, LNTNO, and LNTSO as the dependent
variable, though have the predicted EKC signs, are however, not statistically significant. The coefficients are neither statistically significant nor
have the predicted EKC signs when LNCO2PK and LNTCO2PK are the dependent variables. The coefficient on TRADE is only statistically
significant with LNGHGPK, LNTGHG and LNTCO2 as the dependent variable. In the cubic specification, the coefficients on GDPPK and
GDPPKSQ are statistically significant with CO2PK, TCO2 and TNO as the dependent variables; the signs are however, opposite to that
predicted by the EKC analysis. Also, the sign on the GDPPKCB is negative and statistically significant for these variables; this signifies the
existence of more than one turning point in the curve. This pattern implies that environmental degradation will first decrease as GDP per capita
rises, then increase The coefficients are neither statistically coefficient nor with the predicted signs in the regressions with other indicators as the
dependent variables. The coefficient on TRADE is statistically significant with GHGPK, CO2PK, TGHG, TCO2 and TNO as the dependent
variables; the sign is positive, showing that an increase in trade volume increases the emissions of greenhouse gases, nitrogen oxides and carbon
dioxide at the per capita level. The logarithmic form was dropped in the cubic specification due to multi-collinearity.
Table 1. Results of unit roots test
VARIABLE

ADF

DFGLS

VARIABLE

ADF

DFGLS

VARIABLE

ADF

DFGLS

GHGPK

-0.898

-1.767

DGHGPK

-2.766

-3.455

D2GHGPK

-6.425

NOPK

3.006

-2.378

DNOPK

-3.388

D2NOPK

SOPK

0.05

-1.942

DSOPK

-2.793

-2.088

D2SOPK

-4.599

-3.343

CO2PK

-1.452

-1.829

DCO2PK

-3.301

-2.382

D2CO2PK

-72.418

GDPPK

-1.42

-3.75

DGDPPK

-3.076

D2GDPPK

TRADE

-2.356

-2.198

DTRADE

-1.899

-1.938

D2TRADE

-4.618

-3.343

TGHG

-2.43

-3.155

DTGHG

-2.955

-3.579

D2TGHG

-6.686

TNO

2.078

-2.103

DTNO

-1.737

-3.712

D2TNO

-6.421

TSO

0.346

-1.918

DTSO

-2.541

-2.078

D2TSO

-4.373

-3.833

TCO2

-1.734

-1.81

DTCO2

-3.295

-2.303

D2TCO2

-13.375

LNGHGPK

-0.859

-2.601

DLNGHGPK

-2.716

-3.428

D2LNGHGPK

-6.329

LNNOPK

3.802

-2.56

DLNNOPK

-3.962

D2LNNOPK

LNSOPK

0.587

-2.131

DLNSOPK

-2.111

-2.226

D2LNSOPK

-3.452

-3.804

LNCO2PK

-1.461

-1.933

DLNCO2PK

-3.337

-2.432

D2LNCO2PK

-9.238

LNGDPPK

-1.735

-3.523

DLNGDPPK

-3.045

D2LNGDPPK

LNTRADE

-2.669

-2.486

DLNTRADE

-1.959

-2.838

D2LNTRADE

-4.899

-3.262

LNTGHG

-2.631

-3.012

DLNTGHG

-2.763

-3.539

D2LNTGHG

-6.4

LNTNO

2.479

-2.184

DLNTNO

-1.407

-4.147

D2LNTNO

-6.416

LNTSO

0.404

-2.129

DLNTSO

-2.132

-2.249

D2LNTSO

-3.467

-3.257

LNTCO2

-1.778

-1.864

DLNTCO2

-3.346

-2.33

D2LNTCO2

-12.881

*The critical values of t-statistics for the ADF are -3.00 and -2.63 (and that of DFGLS, -3.19 and-2.89) at 5% and 10% level of significance respectively.

17

The Impact of Economic Growth and Trade on the Environment: the Canadian Case

18
17
CO2PK
16

SOPK
80

15
14

50

20

40

60

21

60

NOPK
70

GHGPK
22

80

23

100

90

24

120

International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

25000

30000

35000

40000

25000

30000

GDPPK

35000

25000

40000

30000

35000

40000

40000

40000

550000
TCO2
500000
450000

1000

1800

1500

2000

TSO
2000

TNO
2200

2500

2400

3000

2600

750000
700000
TGHG
650000

35000

35000

(b)

600000
550000

30000

30000
GDPPK

(a)

25000

25000

GDPPK

GDPPK

25000

30000

GDPPK

35000

40000

25000

30000

GDPPK

35000

40000

25000

30000

GDPPK

35000

40000

GDPPK

(d)

2.8
LNCO2PK
2.75

3.5

2.7

4.1

3.05

4.2

LNSOPK

LNNOPK

LNGHGPK

4.3

3.1

4.5

4.4

2.85

4.5

3.15

(c)

10.2

10.3

10.4
LNGDPPK

10.5

10.2

10.3

10.4
LNGDPPK

10.2

10.5

10.3

10.4
LNGDPPK

10.5

10.3

10.4
LNGDPPK

10.5

10.2

10.3

10.4
LNGDPPK

10.5

(f)

LNTCO2
13.15

7.8

10.2

10.3

10.4
LNGDPPK

10.5

13

7.5

7.2

13.3

13.05

7.6

7.4

13.1

LNTSO
7.6

LNTNO
7.7

LNTGHG
13.4

7.8

13.2

13.5

7.9

13.25

(e)

10.2

10.2

10.3

10.4
LNGDPPK

10.5

10.2

(g)

10.3

10.4
LNGDPPK

10.5

(h)
Figure 1. Results of the experiments

Kayode Emmanuel Olaide *


International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

Table 2. Results of EKC Models


(a)
(1)
GHGPK
0.000918
(0.45)

(2)
NOPK
0.0128
(0.94)

(3)
SOPK
0.00716
(0.27)

(4)
CO2PK
-0.000905
(-0.44)

-1.47e-08
(-0.47)

-0.000000240
(-1.15)

-0.000000187
(-0.45)

1.38e-08
(0.44)

TRADE

0.0822*
(2.54)

0.258
(1.19)

0.124
(0.29)

0.0573
(1.75)

_cons

2.380
(0.08)
23

-98.48
(-0.48)
23

32.75
(0.08)
23

27.19
(0.88)
23

GDPPK
GDPPKSQ

t statistics in parentheses
*
p < 0.05, ** p < 0.01, *** p < 0.001

(b)
(1)
TGHG
21.01
(0.54)

(2)
TNO
0.403
(1.24)

(3)
TSO
0.187
(0.25)

(4)
TCO2
-37.88
(-0.81)

-0.000161
(-0.27)

-0.00000691
(-1.38)

-0.00000468
(-0.41)

0.000709
(0.98)

TRADE

2191.6**
(3.52)

8.100
(1.56)

6.784
(0.57)

1627.6*
(2.17)

_cons

24719.4
(0.04)
23

-3830.3
(-0.78)
23

725.0
(0.06)
23

871094.8
(1.23)
23

GDPPK
GDPPKSQ

t statistics in parentheses
*
p < 0.05, ** p < 0.01, *** p < 0.001

(c)
(1)
GHGPK
-0.0349
(-1.89)

(2)
NOPK
-0.240
(-1.97)

(3)
SOPK
-0.379
(-1.50)

(4)
CO2PK
-0.0492**
(-2.89)

GDPPKSQ

0.00000109
(1.93)

0.00000753
(2.02)

0.0000117
(1.51)

0.00000150*
(2.87)

GDPPKCB

-1.12e-11
(-1.95)

-7.91e-11
(-2.09)

-1.21e-10
(-1.54)

-1.51e-11*
(-2.85)

TRADE

0.105**
(3.23)

0.416
(1.95)

0.365
(0.82)

0.0875**
(2.93)

_cons

386.7
(1.95)
23

2612.0
(1.99)
23

4173.3
(1.54)
23

545.0**
(2.97)
23

GDPPK

t statistics in parentheses
*
p < 0.05, ** p < 0.01, *** p < 0.001

(d)
(1)
TGHG
-539.3
(-1.47)

(2)
TNO
-6.255*
(-2.21)

(3)
TSO
-11.24
(-1.63)

(4)
TCO2
-1097.9*
(-2.77)

GDPPKSQ

0.0171
(1.52)

0.000198*
(2.28)

0.000347
(1.64)

0.0333*
(2.75)

GDPPKCB

-0.000000175
(-1.54)

-2.09e-09*
(-2.36)

-3.58e-09
(-1.67)

-0.000000332*
(-2.69)

TRADE

2541.5***
(3.95)

12.26*
(2.47)

13.92
(1.15)

2289.6**
(3.30)

_cons

6034641.8
(1.53)
23

67578.2*
(2.21)
23

123291.1
(1.66)
23

12240671.8*
(2.87)
23

GDPPK

t statistics in parentheses
*
p < 0.05, ** p < 0.01, *** p < 0.001

18

19

The Impact of Economic Growth and Trade on the Environment: the Canadian Case
International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

(e)
(1)
LNGHGPK
11.40
(0.37)

(2)
LNNOPK
71.81
(1.06)

(3)
LNSOPK
50.19
(0.34)

(4)
LNCO2PK
-25.70
(-0.63)

LNGDPPKSQ

-0.553
(-0.37)

-3.519
(-1.08)

-2.535
(-0.35)

1.236
(0.62)

LNTRADE

0.253*
(2.52)

0.273
(1.24)

0.450
(0.93)

0.248
(1.86)

_cons

-56.74
(-0.36)
23

-363.0
(-1.03)
23

-245.4
(-0.32)
23

135.3
(0.64)
23

LNGDPPK

t statistics in parentheses
*
p < 0.05, ** p < 0.01, *** p < 0.001

(f)
(1)
LNTGHG
-0.299
(-0.02)

(2)
LNTNO
60.18
(1.20)

(3)
LNTSO
38.57
(0.29)

(4)
LNTCO2
-38.87
(-1.34)

LNGDPPKSQ

0.0384
(0.05)

-2.931
(-1.22)

-1.948
(-0.31)

1.897
(1.36)

LNTRADE

0.227***
(4.07)

0.247
(1.52)

0.424
(0.99)

0.229*
(2.42)

11.44
(0.13)
23

-302.1
(-1.17)
23

-184.5
(-0.27)
23

211.2
(1.40)
23

LNGDPPK

_cons
N

t statistics in parentheses
*
p < 0.05, ** p < 0.01, *** p < 0.001

Table 3. Results of bounds testing


VARIABLE
GDPPK/GHGPK
GHGPK/GDPPK
TRADE/GHGPK
GHGPK/TRADE
GDPPK/NOPK
NOPK/GDPPK
TRADE/NOPK
NOPK/TRADE
GDPPK/SOPK
SOPK/GDPPK
TRADE/SOPK
SOPK/TRADE
GDPPK/CO2PK
CO2PK/GDPPK
TRADE/CO2PK
CO2PK/TRADE
GDPPK/TGHG
TGHG/GDPPK
TRADE/TGHG
TGHG/TRADE
GDPPK/TNO
TNO/GDPPK
TRADE/TNO
TNO/TRADE
GDPPK/TSO
TSO/GDPPK
TRADE/TSO
TSO/TRADE
GDPPK/TCO2
TCO2/GDPPK
TRADE/TCO2
TCO2/TRADE

F-STATISTICS
23.03
3.27
14.06
3.27
0.51
4.59
0.42
4.59
2.68
52.8
1.48
52.8
4.28
4.13
15.35
4.13
4.73
8.73
7.04
8.73
1.36
5.82
0.56
5.82
2.56
67.75
1.45
67.75
4.86
6.76
23.52
6.76

VARIABLE
LNGDPPK/LNGHGPK
LNGHGPK/LNGDPPK
LNTRADE/LNGHGPK
LNGHGPK/LNTRADE
LNGDPPK/LNNOPK
LNNOPK/LNGDPPK
LNTRADE/LNNOPK
LNNOPK/LNTRADE
LNGDPPK/LNSOPK
LNSOPK/LNGDPPK
LNTRADE/LNSOPK
LNSOPK/LNTRADE
LNGDPPK/LNCO2PK
LNCO2PK/LNGDPPK
LNTRADE/LNCO2PK
LNCO2PK/LNTRADE
LNGDPPK/LNTGHG
LNTGHG/LNGDPPK
LNTRADE/LNTGHG
LNTGHG/LNTRADE
LNGDPPK/LNTNO
LNTNO/LNGDPPK
LNTRADE/LNTNO
LNTNO/LNTRADE
LNGDPPK/LNTSO
LNTSO/LNGDPPK
LNTRADE/LNTSO
LNTSO/LNTRADE
LNGDPPK/LNTCO2
LNTCO2/LNGDPPK
LNTRADE/LNTCO2
LNTCO2/LNTRADE

F-STATISTICS
6.29
1.56
7.63
1.56
1.55
6.86
0.94
6.86
6.64
24.81
5.67
24.81
2.36
3.2
3.2
3.2
0.78
2.05
1.52
2.05
3.85
7.37
1.92
7.37
6.08
21.84
4.69
21.84
2.53
4.33
2.53
4.33

*The critical value ranges of F-statistics are 3.96-4.53 and 3.21-3.74 at 5% and 10% level of significance respectively [Paresh Kumar Narayan (2005)].

5.3. Test results for co-integration


An F deletion test was applied to equations (2) - (4) for each form of the environmental degradation indicators (at per capita and total
concentrations), per capital GDP and trade in order to test the existence of a long-run relationship. The results of bounds testing show that in the
level form, there is a long-run relationship between the variables when per capita GDP is the dependent variable and GHGPK, TGHG and TCO2
are the explanatory variables; when TRADE is the dependent variable and GHGPK, TGHG, CO2PK and TCO2 are the explanatory variables,
because its F-statistic exceeds the upper bound critical value at a 5% level of significance. There is also a co-integration when each of NOPK,
SOPK, TGHG, TNO, TSO and TCO2 is the dependent variable. The null hypothesis of no co-integration however, cannot be rejected when each
of GHGPK and CO2PK, is used as the dependent variable because F-statistics is below the lower bound critical value at a 5% level of

Kayode Emmanuel Olaide *

20

International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

significance. In the logarithmic form, there is a co-integration relationship when each of LNGDPPK and LNTRADE is the dependent variable,
and LNGHGPK, LNSOPK and LNTSO is the explanatory variable; and also when each of LNNOPK, LNSOPK, LNTGHG, LNTNO, LNTSO
and LNTCO2 is the dependent variable. Also, there is no co-integration when each of LNGHGPK and LNCO2PK is the dependent variable. The
results of bounds testing are presented in table 3.
5.4. Test results for Vector Error Correction and Granger causality
The optimal lag length for the Vector Error Correction model was determined using the AIC and the SBIC. It was found to be 2. This is shown
in Table4 (a- d) below.

Table 4. Lag length determination for VEC


(a) GDPPK GHGPK NOPK SOPK CO2PK TRADE
Lag
0
1
2
3
4

LL
-338.119
-230.917
-101.715
2952.21
3063.18

Lag
0
1
2
3
4

LL
-865.282
-757.118
-639.841
2457.62
2578.45

Lag
0
1
2
3
4

LL
126.153
243.325
371.928
3270.05
3634.05

LR

df

214.41
258.4
6107.8
221.95*

36
36
36
36

0.000
0.000
0.000
0.000

LR

df

216.33
234.55
6194.9
241.66*

36
36
36
36

0.000
0.000
0.000
0.000

FPE
2.2e+08
150078
41.4054*
.
.

AIC
36.2231
28.7281
18.9173
-298.759
-310.44*

HQIC
36.2736
29.0814
19.5735
-297.8
-309.481*

SBIC
36.5213
30.8158
22.7945
-293.092
-304.774*

HQIC
91.7644
84.471
76.2184
-245.737
-258.456*

SBIC
92.0122
86.2054
79.4394
-241.03
-253.749*

HQIC
-12.5972
-20.8388
-30.2836
-331.257
-369.573*

SBIC
-12.3495
-19.1044
-27.0626
-326.549
-364.865*

HQIC
-12.4937
-20.7147
-29.9731
-319.903
-361.996*

SBIC
-12.246
-18.9803
-26.7521
-315.195
-357.289*

(b) GDPPK TGHG TNO TSO TCO2 TRADE


FPE
2.7e+32
1.7e+29
1.7e+26*
.
.

AIC
91.7139
84.1177
75.5622
-246.696
-259.415*

(c) LNGDPPK LNGHGPK LNNOPK LNSOPK LNCO2PK TRADE


LR

df

234.34
257.2
5796.2
728.01*

36
36
36
36

0.000
0.000
0.000
0.000

FPE
1.3e-13
3.1e-17
9.2e-21*
.
.

AIC
-12.6477
-21.1921
-30.9397
-332.216
-370.532*

(d) LNGDPPK LNTGHG LNTNO LNTSO LNTCO2 TRADE


Lag
0
1
2
3
4

LL
125.17
242.146
368.978
3162.19
3562.07

LR

df

233.95
253.66
5586.4
799.77*

36
36
36
36

0.000
0.000
0.000
0.000

FPE
1.4e-13
3.5e-17
1.3e-20*
.
.

AIC
-12.5442
-21.068
-30.6293
-320.862
-362.955*

The results of short- and long-run Granger causality are determined within the VECM framework. The short-run causal effects are demonstrated
through the chi square-statistics of the explanatory variables and long run causality is tested with the help of statistical significance and sign of
the error correction term. The short run granger causality results are present in Table5 (a- d) below. The results show that there is a grangercausality from per capita GDP and trade to each of the environmental degradation indicators(at both the per capita and total concentrations), at
the 5% significance level, both in the level and logarithmic forms, except the logarithmic form of per capita and total greenhouse gas emissions.
There is also a granger-causality from each of the indicators to per capita GDP; also from each of the indicators to trade, except for per capita
nitrogen oxides and total nitrogen oxides emission in the level form, at 5% significance level.
Table 5. Short run Granger-causality test
(a)
Equation
D_GHGPK
D_GDPPK
D_TRADE
D_NOPK
D_GDPPK
D_TRADE
D_SOPK
D_GDPPK
D_TRADE
D_CO2PK
D_GDPPK
D_TRADE

Parms
11
11
11
11
11
11
11
11
11
11
11
11

RMSE
0.38853
479.244
2.64138
1.2792
453.783
3.11886
1.01466
526.925
3.03598
0.444626
374.367
1.78209

R-sq
0.7691
0.8421
0.7877
0.8863
0.8584
0.704
0.9731
0.8091
0.7196
0.7691
0.9037
0.9034

chi2
26.64339
42.66647
29.6858
62.37451
48.51146
19.0301
289.5311
33.91179
20.52607
26.64978
75.03081
74.79014

P>chi2
0.0052
0.0000
0.0018
0.0000
0.0000
0.0606
0.0000
0.0004
0.0386
0.0052
0.0000
0.0000

21

The Impact of Economic Growth and Trade on the Environment: the Canadian Case
International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

(b)
Equation
D_TGHG
D_GDPPK
D_TRADE
D_TNO
D_GDPPK
D_TRADE
D_TSO
D_GDPPK
D_TRADE
D_TCO2
D_GDPPK
D_TRADE

Parms
11
11
11
11
11
11
11
11
11
11
11
11

RMSE
11877.1
483.699
2.61557
41.3064
421.763
3.1449
29.7141
525.308
3.02036
12331
379.879
2.06076

Equation
D_LNGHGPK
D_LNGDPPK
D_LNTRADE
D_LNNOPK
D_LNGDPPK
D_LNTRADE
D_LNSOPK
D_LNGDPPK
D_LNTRADE
D_LNCO2PK
D_LNGDPPK
D_LNTRADE

Parms
11
11
11
11
11
11
11
11
11
11
11
11

RMSE
0.02161
0.015802
0.042074
0.012966
0.012177
0.04407
0.022972
0.015621
0.038658
0.026767
0.012366
0.02423

Equation
D_LNTGHG
D_LNGDPPK
D_LNTRADE
D_LNTNO
D_LNGDPPK
D_LNTRADE
D_LNTSO
D_LNGDPPK
D_LNTRADE
D_LNTCO2
D_LNGDPPK
D_LNTRADE

Parms
11
11
11
11
11
11
11
11
11
11
11
11

RMSE
0.021205
0.015815
0.042768
0.013311
0.011745
0.043918
0.021387
0.015807
0.039494
0.024881
0.012003
0.025583

R-sq
0.7965
0.8392
0.7918
0.832
0.8777
0.6991
0.9707
0.8103
0.7224
0.8242
0.9008
0.8708

chi2
31.30422
41.73746
30.43314
39.62319
57.41785
18.58444
265.4733
34.17016
20.8219
37.5035
72.63841
53.91367

P>chi2
0.0010
0.0000
0.0014
0.0000
0.0000
0.0690
0.0000
0.0003
0.0353
0.0001
0.0000
0.0000

R-sq
0.6586
0.8178
0.7556
0.9454
0.8918
0.7318
0.9513
0.822
0.7936
0.7804
0.8884
0.9189

chi2
15.43533
35.91034
24.72784
138.5122
65.94735
21.83068
156.1909
36.93587
30.76848
28.43338
63.69894
90.68445

P>chi2
0.1634
0.0002
0.0100
0.0000
0.0000
0.0257
0.0000
0.0001
0.0012
0.0028
0.0000
0.0000

R-sq
0.6879
0.8175
0.7474
0.9125
0.8994
0.7337
0.9467
0.8177
0.7846
0.8101
0.8949
0.9096

chi2
17.63648
35.83636
23.67563
83.47255
71.48889
22.03792
142.0978
35.8808
29.14361
34.12781
68.10246
80.52109

P>chi2
0.0904
0.0002
0.0142
0.0000
0.0000
0.0241
0.0000
0.0002
0.0022
0.0003
0.0000
0.0000

(c)

(d)

6.

Conclusion and policy implementation

The results in this paper derived from four indicators of air pollution in Canada show that the reduced form models of the EKC do not provide an
adequate representation of the growth-environment relationship in Canada. It however, reveals a positive relationship between trade and the
emissions of greenhouse gases in general, carbon dioxide and nitrogen oxides. This implies that an increase in the volume of the Canadian trade
leads to the generation of more of these pollutants. The results also show that there is a long run relationship between each of these pollution
indicators and economic growth and trade; and also a bi-directional granger-causality between each of the indicators and economic growth and
trade. Canadas per capita GHG decreased by nearly 5 percent between 1990 and 2010, while its total GHG emissions grew 18 percent
(Environment Canada, 2014). The largest contributor to Canadas GHG emissions is the energy sector, which include power generation (heat
and electricity), transportation, and fugitive sources (Conference Board of Canada). The energy sector was responsible for 81 percent of
Canadas total GHG emissions in 2010, out of which energy combustion accounts for 45 percent (Conference Board of Canada). Carbon dioxide
accounts for the largest proportion of the GHG emissions; it contributed 79 percent of Canadas total emissions in 2012 (Environment Canada,
2014). Canada is one of the largest emitters of GHG in the world, being one of the worlds largest energy exporters. The main reason for the
increase in Canadas GHG has been growth in exports of petroleum, natural gas and forest products. Air quality is affected by sulphur oxides
emitted from smelters, electricity generators, petroleum refineries, iron and steel mills, and pulp and paper mills. Between 1990 and 2009,
Canada decreased its per capita sulphur oxides emissions by 34 percent. While the reduction was good, Canadas progress was weaker than the
progress made by 14 of its 17 OECDs peer countries (Conference Board of Canada). In 2012, sulphur oxides emissions decreased by 0.3
percent from 2011 levels, and were 59 percent lower than in 1990 (Environment Canada,2014). Nitrogen oxides contribute to smog and acid rain
and are hazardous to human health and the environment. Nitrogen oxides are released during the combustion of fossil fuels, mainly by vehicles,
electricity generation, and manufacturing process. In 2012, nitrogen oxides emissions in Canada decrease by 5 percent from 2011 levels, and
were 27 percent lower than in 1990 (Environment Canada, 2014). Canada needs to do more to reduce emissions from the transportation,
electricity, and industrial sectors (Conference Board of Canada).
These results suggest that, Canada the main challenge for Canada is to further reduce urban and regional air pollutants through more pollution
control, technological progress, energy savings, and sustainable transportations. There are already some moves in this direction. The Canadian
federal government recently set a new target of reducing total GHG emissions by 17 percent from 2005 levels by 2020. To achieve this it has
introduced three major initiatives: passenger automobile and light truck GHG emissions regulation; heavy duties vehicles emissions regulations;
regulations on coal fire electricity regulations (Government of Canada, 2012). Federal and provincial and United States agreements on capping
sulphur oxides; and introduction of cleaner technology and fuels for vehicles. However, Canada still needs to do more, in order to maintain a
cleaner environment.

Kayode Emmanuel Olaide *

22

International Journal of Economy, Management and Social Sciences Vol(5), No (2), June, 2016.

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