A Dynamic Model of the Environmental Kuznets Curve : Turning Point and Public Poliy
AbstractWe 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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Bibliographic InfoPaper provided by CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich in its series CER-ETH Economics working paper series with number 04/33.
Length: 23 pages
Date of creation: Jul 2004
Date of revision: May 2005
Environmental Kuznets Curve; Pollution; Abatement; External Ef- fects; Economic Growth; Public Policy;
Other versions of this item:
- Hannes Egli & Thomas Steger, 2007. "A Dynamic Model of the Environmental Kuznets Curve: Turning Point and Public Policy," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 36(1), pages 15-34, January.
- Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-07-03 (All new papers)
- NEP-ENV-2005-07-03 (Environmental Economics)
- NEP-RES-2005-07-03 (Resource Economics)
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