EKC-type transitions and environmental policy under pollutant uncertainty and cost irreversibility

Economic growth and abatement activities in a stochastic environment: a multi-objective approach

“…In our growth and environment setting, Proposition 5 shows that the levels of capital and environmental quality in a stochastic framework will generally be smaller than their counterparts in the deterministic case 12 . The result that capital accumulation is reduced as a response to increasing uncertainty is consistent with previous works on stochastic endogenous growth (Bucci et al, 2011; Marsiglio and La Torre, 2012); comparing the result that also environmental quality is reduced by uncertainty with previous literature is more difficult since these works assume that pollution is stochastic as a consequence of randomness in production 13 (Soretz, 2003;.…”

“…However, the environment is also subject to random shocks driven by a Brownian motion 4 (as in Kijima et al, 2011).…”

“…Note that our formulation of environmental quality and pollution is consistent with Brock and Taylor's (2005), where pollution is a by-product of productive activities meaning that when output is zero (infinite) pollution is zero (infinite) too. 4 Differently from Kijima et al (2011), where the environment is subject to completely exogenous shocks, in our framework the planner by choosing the share of emissions to abate endogenously determines the trend of the stochastic process affecting environmental quality. 5 Notice that in the u = 0 case, for sufficiently small levels of capital environmental quality might initially improve due to pollution absorption; however, as capital keeps growing it will decrease.…”

“…Despite the importance of such questions, very few studies analyze the effect of environmental uncertainty on economic outcomes 1 . Existing works focus on the production side, looking at how uncertainty on the production process affects economic agents' decisions (Soretz, 2003;2004;, or show how uncertainty on the evolution of pollution may generate different development paths (Kijima et al, 2011;Privileggi and Marsiglio, 2013). To the best of our knowledge, apart from Athanassoglou and Xepapadeas (2012) and La Torre et al (2016) who analyze a pollution control problem under uncertainty without modeling the related macroeconomic effects, how uncertainty affects the trade off between environmental and economic performance in an economic growth setup has never been analyzed thus far.…”

The Test of Industrial Environmental Kuznets Curve Hypothesis in Jiangsu Province

“…In 1991, Grossman and Kruger (1991) analyzed the data of urban air quality estimated by the Global Environmental Monitoring System (GEMS), finding that the inversed-U shaped relationship existed with respect to sulfur dioxide and soot emission. Then, as the leaders, Grossman and Kruger(1995) empirically studied the relationship between economic development and environment: in the early stage, environmental quality is easily deteriorated with the process of economic development, when the economy develops to a certain level, deterioration of the environment will reach its peak, after that, with the increase of per capita income and the development of economy, environmental pollution will get ease because of structure effect and technology effect, and then environment quality will be improved gradually (Dimitra Kaika and Efthimios Zervas,2013).After Grossman and Kruger, some empirical studies showed that the inverted-U shaped relationship between most indicators of environmental quality and per capita income does exist,on the other hand, the conclusions are controversial (Kijima, 2011;Bimonte, 2012). Different from most scholars at that time, Panayotou (1993) Yangzhoumu1978@163.com Transforming and upgrading from factor-driven and capital-driven to innovation-driven is important for economic transformation and upgrading in Jiangsu.…”