Environmental policy and growth when inputs are differentiated in pollution intensity

Ricci, Francesco

doi:10.1007/s10640-006-9076-1

Cited by 48 publications

(52 citation statements)

References 33 publications

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“…Third, pollution taxes might fall disproportionately on old goods if new generations of products become cleaner. Thus a pollution tax speeds up obsolescence and stimulates innovation in new products (Hart, 2004;Ricci, 2007b).…”

Section: The Effect Of Renewable Resource Conservation and Environmenmentioning

confidence: 99%

Green Growth - Lessons from Growth Theory

Smulders¹,

Withagen²

2012

Policy Research Working Papers

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Section: The Effect Of Renewable Resource Conservation and Environmenmentioning

confidence: 99%

Green Growth - Lessons from Growth Theory

Smulders¹,

Withagen²

2012

Policy Research Working Papers

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“…The consequence would be that firms may be forced to alter their production and innovation decisions if pollution is bound to stay below a certain threshold. Among scholars this approach has also proven to be very popular and it can be found in several seminal papers on environmental growth models ranging from Bovenberg and Smulders (1995) to Ricci (2007). Another method is to make the productivity of firms subject to the amount of pollution present in the economy.…”

Section: Effects Of Pollutionmentioning

confidence: 99%

Pollution Externalities in a Schumpeterian Growth Model

Koesler

2010

SSRN Journal

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Die Dis cus si on Pape rs die nen einer mög lichst schnel len Ver brei tung von neue ren For schungs arbei ten des ZEW. Die Bei trä ge lie gen in allei ni ger Ver ant wor tung der Auto ren und stel len nicht not wen di ger wei se die Mei nung des ZEW dar.Dis cus si on Papers are inten ded to make results of ZEW research prompt ly avai la ble to other eco no mists in order to encou ra ge dis cus si on and sug gesti ons for revi si ons. The aut hors are sole ly respon si ble for the con tents which do not neces sa ri ly repre sent the opi ni on of the ZEW.Download this ZEW Discussion Paper from our ftp server:ftp://ftp.zew.de/pub/zew-docs/dp/dp10055.pdf Non-Technical-SummaryGlobal warming, the pollution of the seas or a continuously increasing noise level are just a few examples of environmental issues that have alerted the global public in recent years. As a consequence, more and more scientific bodies and environmental groups are discussing whether the emission of pollution as a by-product of modern economic activity may endanger the exceptional economic growth path, the world has experienced during the last one and a half centuries.To shed further light on this question, a standard Schumpeterian growth model is enlarged to include an environmental dimension. Thereby it explicitly links the pollution intensity of economic activity to the overall level of technological progress. More precisely, it is assumed that pollution arises as an externality of the intermediate good production process and the amount of pollution created in the production process crucially depends on the overall level of technological progress. Within the framework of the model, pollution has different effects on the agents present in the economy. In the basic model solely the households are directly affected by pollution. In a first extension, the model is enlarged to feature a pollution threshold above which no research is possible. A second extension enlarges the choice set of the households and allows for private pollution abatement.In equilibrium, the economy follows a balanced growth path where output, research investment, consumption, as well as the level of technological progress grow at a constant and positive rate. The effect of pollution on the economic growth rate vitally depends on the households' degree of pollution aversion and even more on the link between pollution intensity and the technology level. All in all, pollution dampens the economic growth rate if a rise in the level of technological progress does not imply a big enough decrease of the pollution intensity. It fosters growth if the pollution intensity falls disproportionately fast when the economy advances.Pollution growth is proportional to the growth rate of the economy and also crucially depends on how the pollution intensity of the production process is linked to the level of technological progress. If the pollution intensity declines fast enough when the level of technological progress increases over time, pollution declines.Otherwise pollution grows continuous...

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“…First, the value of innovations increases to the extent that these are relatively clean (a demand pull e ect) (e.g. Hart 2004, Ricci 2007. Second, the (relative) production costs fall as factors of production exit relatively dirty sectors to the bene t of R&D (a favorable cost shift e ect) (e.g.…”

Section: Introductionmentioning

confidence: 99%