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Endowments, preferences, technologies and abatement: growth-environment microfoundations

Author

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  • Alexander Pfaff
  • Shubham Chaudhuri
  • Howard L.M. Nye

Abstract

Will economic growth inevitably degrade the environment, throughout development? We present a household-level framework emphasising the trade-off between consumption that causes pollution and pollution-reducing abatement. Our model provides a simple explanation for upward-turning, non-monotonic paths of environmental quality during economic growth. Its innovation yields sufficient conditions that simultaneously address preferences and technologies. With standard preferences, an asymmetric endowment (i.e., at zero income, consumption is also zero but environmental quality is positive) leads low-income households not to abate, and further this condition is sufficient for an environmental Kuznets curve (EKC) for a wide range of abatement technologies. Without such an endowment, however, even strong economies of scale in abatement are, on their own, insufficient for an EKC.

Suggested Citation

  • Alexander Pfaff & Shubham Chaudhuri & Howard L.M. Nye, 2004. "Endowments, preferences, technologies and abatement: growth-environment microfoundations," International Journal of Global Environmental Issues, Inderscience Enterprises Ltd, vol. 4(4), pages 209-228.
    • Handle: RePEc:ids:ijgenv:v:4:y:2004:i:4:p:209-228
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    Citations

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    Cited by:

    1. Vona, Francesco & Patriarca, Fabrizio, 2011. "Income inequality and the development of environmental technologies," Ecological Economics, Elsevier, vol. 70(11), pages 2201-2213, September.
    2. Kavi Kumar, K.S. & Viswanathan, Brinda, 2007. "Changing structure of income indoor air pollution relationship in India," Energy Policy, Elsevier, vol. 35(11), pages 5496-5504, November.
    3. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).
    4. Andrea Mantovani & Ornella Tarola & Cecilia Vergari, 2014. "Hedonic quality, social norms, and environmental campaigns," Working Papers 2014/36, Institut d'Economia de Barcelona (IEB).

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