Environmental protection and economic growth (original) (raw)
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Optimal Environmental Protection and Environmental Kuznets Curve
2004
This paper explores the link between an environmental policy and economic growth employing an extension of the Neoclassical Growth Model. We include a state equation to renewable natural resources, and consider natural resources as a component of the aggregate productivity. It is assumed that the change of the environmental regulations induces costs and that economic agents also derive some utility
The Environmental Kuznets Curve and Optimal Growth1
Empirical studies suggest the existence of an environmental Kuznets curve: In the initial stages of economic development pollution increases, but eventually the trend is reversed and environmental quality rebounds. Previous efforts to model this phenomenon have relied upon the restrictive assumptions of intergenerational conflicts, ill-defined property rights or higher pollution intensity of more productive capital. This paper develops a simple neoclassical growth model that is free from these assumptions and provides a more general explanation of the evolution of economic growth and environmental quality based on the relative scarcity of capital. The model's predictions are consistent with the environmental Kuznets curve and two other empirical regularities: (i) during the initial stages of economic development, growth is high but there is negligible regulation and expenditures on environmental protection so that pollution levels rise; (ii) at later stages of economic development, better environmental quality is actively pursued, so that pollution is reduced, and economic growth rates are lower. We also show how a pollution tax or tradable permits can only implement the social optimal if accompanied by other taxes on consumption or profits. We solve for the time when environmental quality starts to improve and analyze its determinants. (JEL O13, Q20)
Environmental policy and sustainable economic growth
De Economist, 1995
This paper investigates the consequences of environmental policy for welfare, consumption and production growth in a situation in which environmental quality is initially too low. The natural environment is incorporated in endogenous growth theory in a way that is consistent with some simple notions from the laws of thermodynamics. Environmental policy affects growth, both in the long run and in the short run, by affecting the productivity of investment and the savings behavior of consumers. * I am indebted to L. Bovenberg, S. Cnossen, and Th. van de Klundert for useful comments.
Neoclassical Growth, Environment and Technological Change: The Environmental Kuznets Curve
The Energy Journal, 2009
The paper investigates socially optimal patterns of economic growth and environmental quality in a neoclassical growth model with endogenous technological progress. In the model, the environmental quality affects positively not only to utility but also to production. However, cleaner technologies can be used in the economy whether a part of the output is used in environmentally oriented R&D. In this framework, if the initial level of capital is low then the shadow price of a cleaner technology is low relative to the cost of developing it given by the marginal utility of consumption and it is not worth investing in R&D. Thus, there will be a first stage of growth based only on the accumulation of capital with a decreasing environmental quality until the moment that pollution is great enough to make profitable the investment in R&D. After this turning point, if the new technologies are efficient enough, the economy can evolve along a balanced growth path with an increasing environmental quality. The result is that the optimal investment pattern supports an environmental Kuznets curve.
Economic Growth and the Dynamics of Environmental Quality1
Empirical studies suggest the existence of an environmental Kuznets curve: In the initial stages of economic development pollution increases, but eventually the trend is reversed and environmental quality rebounds. Previous efforts to model this phenomenon have relied upon the restrictive assumptions of intergenerational conflicts, ill-defined property rights or higher pollution intensity of more productive capital. This paper develops a simple neoclassical growth model that is free from these assumptions and provides a more general explanation of the evolution of economic growth and environmental quality based on the relative scarcity of capital. The model's predictions are consistent with the environmental Kuznets curve and two other empirical regularities: (i) during the initial stages of economic development, growth is high but there is negligible regulation and expenditures on environmental protection so that pollution levels rise; (ii) at later stages of economic development, better environmental quality is actively pursued, so that pollution is reduced, and economic growth rates are lower. We also show how a pollution tax or tradable permits can only implement the social optimal if accompanied by other taxes on consumption or profits. We solve for the time when environmental quality starts to improve and analyze its determinants. (JEL O13, Q20)
Non-catastrophic Endogenous Growth and the Environmental Kuznets Curve
Working Papers, 2004
The competitive equilibrium in an endogenous growth model is not Pareto-optimal nor environmentally sustainable in presence of pollution externalities, even if costly abatement activities are allowed to be endogenously decided. In this paper we introduce the ...
Anticipated environmental policy and transitional dynamics in an endogenous growth model
2003
This paper makes a new attempt to investigate how an anticipated environmental policy governs the transitional dynamics of an economy when pollution externality is taken into account. The modeling strategy we use is an AK technology endogenous growth framework with an endogenous leisure-labor choice. It is found that, unlike inelastic labor supply framework, a rise in public abatement expenditure will stimulate the balanced economic growth rate. It is also found that public abatement technology plays an important role in determining the transitional adjustment of the economic growth rate in response to a pre-announced environmental policy.
Endogenous growth effects of environmental policies
Panoeconomicus, 2015
To analyse the impact of the environmental policies, we start by reviewing the literature on the environment, technological knowledge and economic growth. Then, we build a general equilibrium endogenous growth model where final goods are produced either in the skilled-labour intensive Clean sector or in the unskilled-labour intensive Unclean sector. By solving numerically transitional dynamics towards the unique and stable steady state, we observe that environmental policies encourage scale-invariant technological knowledge bias. This, in turn, promotes environmental quality, the skill premium and economic growth. Moreover, the impact of population growth on the steady-state growth rate is higher under strong households? environmental conscientiousness with future generations.
SSRN Electronic Journal, 2013
In this paper, we explore a variety of models attempting to explain the pollution-income relationship (PIR). There has been much literature addressing the notion of an environmental Kuznets curve (EKC). Many researchers find an EKC relationship for certain pollutants, while others do not find evidence of an EKC relationship. There is also literature formally critiquing the EKC. We employ cross-sectional, panel, and time-series analysis to add insight into the relationship between economic growth and environmental degradation, a research area that is far from consensual and that has practical implications. We ultimately find that the clearest case of an EKC effect in our study arises in the analysis of organic water pollution, while there is modest evidence suggesting an EKC effect with regard to CO2, NO, and methane. We also present ample evidence suggesting an anti-EKC effect for PM10. Our analysis causes us to question the existence of an EKC effect throughout the environment in general.