Determinants of a win-win in environmental and economic growth trends of nations: 2000-2010

The consequences surrounding the rise in economic growth of a nation at the expense of a deteriorating environmental quality for any given nation in the long-run could reflect deterioration of human health, quality of life and a further ecosystem destruction which reflects a win-loss situation. This research identifies those nations that have had progress in their economic growth and environmental performance simultaneously over the recent decade in order to identify the nations in a win-win situation. With the use of the environmental performance trend data available from Yale University and Gross Domestic Product per capita from the World Bank database, we provide insights into nations which had a win-win in economic growth and environmental performance trends simultaneously between 2000- 2010 and which did not. Also, we explore nations which had a high win-win trend using thresholds and some of the underlying factors that can help to explain differences in performances across nations. This study employs the K-means clustering technique to identify the different clusters of nations within win-win or other pre-defined clusters for over 200 nations. The environmental performance is divided into environmental health which focuses on human health and ecosystem vitality which focuses on the health of the ecosystem. Within this period, low-income, middle-income and high-income nations had an overall win-win situation in environmental issues that affect human health especially the child mortality indicator in comparison to its water and air quality counterparts. Nations had more of a win-loss situation in environmental issues that affect the ecosystem which connotes win for the economy but a declining ecosystem indicator. The statistically significant variables found to impact the likelihood of win-win in the environmental health category using logistic regressions consists of the initial GDP, initial non-income HDI, average investment spending and improvements in political stability. The explanatory power of the independent variables is strongest for win-win in child mortality and economic growth but not much power to explain for water and air quality situation. On the other hand, having a higher likelihood of a win-win case for the health of the ecosystem and economic growth included improved governance effectiveness, initial income-level, average investment spending and the initial environmental performance level of a nation which all varied by magnitude in its influence on biodiversity, fisheries, forestry, agriculture, air quality, climate change and water use indicators.