Constraints on dematerialisation and allocation of natural capital along a sustainable growth path
AbstractThis 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 InfoArticle provided by Elsevier in its journal Ecological Economics.
Volume (Year): 54 (2005)
Issue (Month): 4 (September)
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Web page: http://www.elsevier.com/locate/ecolecon
Other versions of this item:
- José Manuel Madeira Belbute & João Rodrigues & Tiago Domingos & Pedro Conceição, 2003. "Constraints on Dematerialisation and Allocation of Natural Capital along a Sustainable Growth Path," Economics Working Papers 1_2003, University of Évora, Department of Economics (Portugal).
- C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
- O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
- Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
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