Dirty Industries in Decline: An Introduction to the Case Studies

Abstract

Our empirical research on structural change focuses on industrial sectors which have a particularly heavy impact on the environment. The most important industries are

• extraction of natural resources

• transformation of primary energy such as crude oil or coal into final fuels such as petroleum products or electricity

• production of metals (steel and aluminium), based primarily on processing metal ores

• production of non-metallic mineral products, such as cement, glass or ceramics;

• the chemicals industry

• production of wood pulp and paper products

These industries are the main polluters among all producing sectors. This is not only due to their economic scale but also to their high intensities of pollution, i.e. pollution caused per unit of added value. This means, that a change in the composition of the economy at the expense of these industries would be beneficial for the environment. Because many environmental problems are external costs, the share of these industries in total gross domestic product might be too large, and industrial policies to correct for this kind of market failure justified.