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Constraints on dematerialisation and allocation of natural capital along a sustainable growth path

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  • Rodrigues, João
  • Domingos, Tiago
  • Conceição, Pedro
  • Belbute, José

Abstract

This paper extends the neoclassical growth model with natural capital by introducing two new concepts: allocation of natural capital and materialization. We consider that anthropogenic environmental impact is correlated with the throughput of the economy (materialisation). Materialisation is the material throughput per unit of economic activity. We capture the effect of the reduction of this throughput dematerialisation in the elasticities of materialisation and aggregate environmental impact. In our framework the fraction of natural capital devoted to production does not provide direct environmental services nor does it contribute to ecosystem functioning namely affecting the carrying capacity of natural capital.We analyse an optimal sustainable growth path, in the context of exogenous technological change. Our main conclusion is that the ratio of dematerialisation elasticities must equal the inverse of the share of natural capital in order to assure unbounded economic growth with constant natural capital.

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Bibliographic Info

Article provided by Elsevier in its journal Ecological Economics.

Volume (Year): 54 (2005)
Issue (Month): 4 (September)
Pages: 382-396

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Handle: RePEc:eee:ecolec:v:54:y:2005:i:4:p:382-396

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Web page: http://www.elsevier.com/locate/ecolecon

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Cited by:
  1. Roseta-Palma, Catarina & Ferreira-Lopes, Alexandra & Sequeira, Tiago Neves, 2010. "Externalities in an endogenous growth model with social and natural capital," Ecological Economics, Elsevier, vol. 69(3), pages 603-612, January.
  2. Catarina Roseta-Palma & Alexandra Ferreira-Lopes & Tiago Neves Sequeira, 2008. "Towards an Inclusive Model of Sustainable Growth," Working Papers Series 1 ercwp0408, ISCTE-IUL, Business Research Unit (BRU-IUL).
  3. Kronenberg, Tobias, 2010. "Dematerialisation of consumption: a win-win strategy?," MPRA Paper 25704, University Library of Munich, Germany.
  4. Lafforgue, Gilles, 2008. "Stochastic technical change, non-renewable resource and optimal sustainable growth," Resource and Energy Economics, Elsevier, vol. 30(4), pages 540-554, December.

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