LAUSR

This paper contributes to the environmental Kuznets curve (EKC) literature, which posits an inverted U-shaped relationship between pollution and income, but from a spatial perspective. We explore several spatial statistical and econometric analyses to account for spatial dependence in emissions from carbon dioxide, sulfur dioxide, nitrogen oxides, carbon monoxide, particulate matter (2.5 and 10) and total suspended particulates between all 290 Swedish municipalities. Our results suggest the EKC significantly holds for all but one pollutant (i.e. carbon monoxide) and that this relationship is significantly characterized by spatial dependence. Specifically, we find significant neighbourhood effects as well as significant positive economic spillovers at low income which turns negative at high income on both within and inter-municipality air emissions. Our results and hence implications suggest transboundary pollution control policies aimed at abatement would be more effective through enhanced coordination between adjacent municipalities.