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Sustainable economic development and the environment: Theory and evidence

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Author Info

  • Luisito Bertinelli

    () (CREA, Université du Luxembourg)

  • Eric Strobl

    () (Ecole Polytechnique Paris)

  • Benteng Zou

    () (Institute of Mathematical Economics, Bielefeld University)

Abstract

The relationship between growth and pollution is studied through a vintage capital model, where new technology is more environmentally friendly. We find that once the optimal scrapping age of technologies is reached, an economy may achieve two possible cases of sustainable development, one in which pollution falls and another in which it stabilizes, or a catastrophic outcome, where environmental quality reaches its lower bound. The outcome will depend on countries' investment path and their propensity to innovate in environmentally clean technologies, both of which are likely to differ across economies. Empirical results using long time series for a number of developed and developing countries indeed confirm heterogenous experiences in the pollution-output relationship.

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File URL: http://www.imw.uni-bielefeld.de/papers/files/imw-wp-369.pdf
File Function: First version, 2005
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Bibliographic Info

Paper provided by Bielefeld University, Center for Mathematical Economics in its series Working Papers with number 369.

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Length: 33 pages
Date of creation: Jul 2005
Date of revision:
Handle: RePEc:bie:wpaper:369

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Postal: Postfach 10 01 31, 33501 Bielefeld
Phone: 0521/106-3821
Web page: http://www.imw.uni-bielefeld.de/
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Related research

Keywords: environmental quality; sustainable economic development; vintage capital model; EKC;

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References

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  1. Larry E. Jones & Rodolfo E. Manuelli, 2000. "Endogenous policy choice: the case of pollution and growth," Staff Report 276, Federal Reserve Bank of Minneapolis.
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  8. BERTINELLI, Luisito & STROBL, Eric, 2004. "The Environmental Kuznets Curve semi-parametrically revisited," CORE Discussion Papers 2004051, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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  19. BERTINELLI, Luisito & STROBL, Eric & ZOU, Benteng, 2006. "Polluting technologies and sustainable economic development," CORE Discussion Papers 2006052, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
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Cited by:
  1. Park, Soonae & Lee, Youngmi, 2011. "Regional model of EKC for air pollution: Evidence from the Republic of Korea," Energy Policy, Elsevier, vol. 39(10), pages 5840-5849, October.

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