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A Dynamic Model of the Environmental Kuznets Curve : Turning Point and Public Poliy

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Author Info
Hannes Egli () (Institute of Economic Research (WIF), Swiss Federal Institute of Technology Zurich (ETH))
Thomas M. Steger () (Institute of Economic Research (WIF), Swiss Federal Institute of Technology Zurich (ETH))

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Abstract

We set up a simple dynamic macroeconomic model with (i) polluting consump- tion and a preference for a clean environment, (ii) increasing returns in abate- ment giving rise to an EKC and (iii) sustained growth resulting from a linear final-output technology. The model captures two sorts of market failures caused by external effects associated with consumption and environmental effort. This model is employed to investigate the determinants of the turning point and the (relative) effectiveness of different public policy measures aimed at a reduction of the environmental burden. Moreover, the model offers a potential explana- tion of an N-shaped pollution-income relation. Finally, it is shown that the model is compatible with most empirical regularities on economic growth and the environment.

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Publisher Info
Paper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series Economics working paper series with number 04/33.

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Length: 23 pages
Date of creation: Jul 2004
Date of revision: May 2005
Handle: RePEc:eth:wpswif:04-33

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Related research
Keywords: Environmental Kuznets Curve; Pollution; Abatement; External Ef- fects; Economic Growth; Public Policy;

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Find related papers by JEL classification:
Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Lieb, Christoph M., 2002. "The environmental Kuznets curve and satiation: a simple static model," Environment and Development Economics, Cambridge University Press, vol. 7(03), pages 429-448, July. [Downloadable!]
  2. Philippe Michel & Gilles Rotillon, 1995. "Disutility of pollution and endogenous growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 6(3), pages 279-300, October. [Downloadable!] (restricted)
  3. repec:att:wimass:1920416 is not listed on IDEAS
  4. Hannes Egli, 2005. "A New Approach to Pollution Modelling in Models of the Environmental Kuznets Curve," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 459-473, September. [Downloadable!]
    Other versions:
  5. Stokey, Nancy L, 1998. "Are There Limits to Growth?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 1-31, February.
  6. Ortigueira, Salvador & Santos, Manuel S, 1997. "On the Speed of Convergence in Endogenous Growth Models," American Economic Review, American Economic Association, vol. 87(3), pages 383-99, June. [Downloadable!] (restricted)
  7. Brunner, Martin & Strulik, Holger, 2002. "Solution of perfect foresight saddlepoint problems: a simple method and applications," Journal of Economic Dynamics and Control, Elsevier, vol. 26(5), pages 737-753, May. [Downloadable!] (restricted)
    Other versions:
  8. Sjak Smulders & Lucas Bretschger & Hannes Egli, 2005. "Economic growth and the diffusion of clean technologies : explaining environmental Kuznets," Economics working paper series 05/42, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich. [Downloadable!]
  9. Smulders, Sjak & Gradus, Raymond, 1996. "Pollution abatement and long-term growth," European Journal of Political Economy, Elsevier, vol. 12(3), pages 505-532, November. [Downloadable!] (restricted)
  10. David Maradan & Anatoli Vassiliev, 2005. "Marginal Costs of Carbon Dioxide Abatement: Empirical Evidence from Cross-Country Analysis," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 377-410, September. [Downloadable!]
  11. Andreoni, James & Levinson, Arik, 2001. "The simple analytics of the environmental Kuznets curve," Journal of Public Economics, Elsevier, vol. 80(2), pages 269-286, May. [Downloadable!] (restricted)
    Other versions:
  12. Eicher, Theo S. & Turnovsky, Stephen J., 2001. "Transitional dynamics in a two-sector non-scale growth model," Journal of Economic Dynamics and Control, Elsevier, vol. 25(1-2), pages 85-113, January. [Downloadable!] (restricted)
  13. Stern, David I., 2004. "The Rise and Fall of the Environmental Kuznets Curve," World Development, Elsevier, vol. 32(8), pages 1419-1439, August. [Downloadable!] (restricted)
    Other versions:
  14. Christoph Lieb, 2004. "The Environmental Kuznets Curve and Flow versus Stock Pollution: The Neglect of Future Damages," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 29(4), pages 483-506, December. [Downloadable!] (restricted)
  15. William A. Brock & M. Scott Taylor, 2004. "The Green Solow Model," NBER Working Papers 10557, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  16. David E. A. Giles & Carl Mosk, 2003. "Ruminant Eructation and a Long-Run Environmental Kuznets' Curve for Enteric Methane in New Zealand: Conventional and Fuzzy Regression Analysis," Econometrics Working Papers 0306, Department of Economics, University of Victoria. [Downloadable!]
  17. John, A & Pecchenino, R, 1994. "An Overlapping Generations Model of Growth and the Environment," Economic Journal, Royal Economic Society, vol. 104(427), pages 1393-1410, November. [Downloadable!] (restricted)
  18. Selden Thomas M. & Song Daqing, 1995. "Neoclassical Growth, the J Curve for Abatement, and the Inverted U Curve for Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 162-168, September. [Downloadable!] (restricted)
  19. Susmita Dasgupta et al., 2002. "Confronting the Environmental Kuznets Curve," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 147-168, Winter. [Downloadable!] (restricted)
  20. Grossman, Gene M & Krueger, Alan B, 1995. "Economic Growth and the Environment," The Quarterly Journal of Economics, MIT Press, vol. 110(2), pages 353-77, May. [Downloadable!] (restricted)
    Other versions:
  21. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    Other versions:
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Hannes Egli, 2005. "A New Approach to Pollution Modelling in Models of the Environmental Kuznets Curve," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 459-473, September. [Downloadable!]
    Other versions:
  2. Martin F. Quaas & Sjak Smulders, 2008. "Pollution and the Efficiency of Urban Growth," Working Papers 2008.75, Fondazione Eni Enrico Mattei. [Downloadable!]
  3. Annicchiarico, Barbara & Bennato, Anna Rita & Costa, Andrea, 2009. "Economic Growth and Carbon Dioxide Emissions in Italy, 1861-2003," MPRA Paper 12817, University Library of Munich, Germany. [Downloadable!]
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