Advanced Search
MyIDEAS: Login

Prosperity with growth: Economic growth, climate change and environmental limits

Contents:

Author Info

  • Cameron Hepburn
  • Alex Bowen
Registered author(s):

    Abstract

    Debate about the relationship between environmental limits and economic growth has been taking place for several decades. These arguments have re-emerged with greater intensity following advances in the understanding of the economics of climate change, increases in resource and oil prices and the re-emergence of the discussion about “peak oil”. The economic pessimism created by the great recession of 2008-2012 has also put the spotlight back on the prospects for economic growth. This chapter provides a conceptual and synthetic analysis of the relationship between economic growth and environmental limits, including those imposed by climate change. It explores two related questions. Will environmental limits, including limits on the climate system, slow or even halt economic growth? If not, how will the nature of economic growth have to alter? It is concluded that continued economic growth is feasible and desirable, although not without significant changes in its characteristics. These changes need to involve ultimately the reduction of the rate of material output, with continued growth in value being generated by expansion in the ‘intellectual economy’.

    Download Info

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
    File URL: http://www.lse.ac.uk/GranthamInstitute/wp-content/uploads/2014/02/WP93-prosperity-with-growth-climate-change.pdf
    Download Restriction: no

    Bibliographic Info

    Paper provided by Grantham Research Institute on Climate Change and the Environment in its series Grantham Research Institute on Climate Change and the Environment Working Papers with number 93.

    as in new window
    Length:
    Date of creation: Oct 2012
    Date of revision:
    Handle: RePEc:lsg:lsgwps:wp93

    Contact details of provider:
    Postal: Houghton Street, London WC2A 2AE
    Phone: +44 (020) 7405 7686
    Web page: http://www.lse.ac.uk/grantham.
    More information through EDIRC

    Related research

    Keywords:

    This paper has been announced in the following NEP Reports:

    References

    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.:
    as in new window
    1. 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.
    2. Stiglitz, Joseph E., 1997. "Georgescu-Roegen versus Solow/Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 269-270, September.
    3. Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
    4. Grossman, G.M. & Helpman, E., 1993. "Endogenous, Innovation in the Theory of Growth," Papers 165, Princeton, Woodrow Wilson School - Public and International Affairs.
    5. Kanbur, Ravi, 2001. "Economic Policy, Distribution and Poverty: The Nature of Disagreements," World Development, Elsevier, vol. 29(6), pages 1083-1094, June.
    6. Sollner, Fritz, 1997. "A reexamination of the role of thermodynamics for environmental economics," Ecological Economics, Elsevier, vol. 22(3), pages 175-201, September.
    7. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
    8. David I. Stern, 2003. "The Rise and Fall of the Environmental Kuznets Curve," Rensselaer Working Papers in Economics 0302, Rensselaer Polytechnic Institute, Department of Economics.
    9. Byrne, Margaret M., 1997. "Is growth a dirty word? Pollution, abatement and endogenous growth," Journal of Development Economics, Elsevier, vol. 54(2), pages 261-284, December.
    10. Romer, Paul M, 1990. "Endogenous Technological Change," Journal of Political Economy, University of Chicago Press, vol. 98(5), pages S71-102, October.
    11. Sorrell, Steve & Miller, Richard & Bentley, Roger & Speirs, Jamie, 2010. "Oil futures: A comparison of global supply forecasts," Energy Policy, Elsevier, vol. 38(9), pages 4990-5003, September.
    12. Opschoor, J. B., 1997. "The hope, faith and love of neoclassical environmental economics," Ecological Economics, Elsevier, vol. 22(3), pages 281-283, September.
    13. 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.
    14. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth Through Creative Destruction," Scholarly Articles 12490578, Harvard University Department of Economics.
    15. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
    16. Gene M. Grossman & Elhanan Helpman, 1989. "Quality Ladders in the Theory of Growth," NBER Working Papers 3099, National Bureau of Economic Research, Inc.
    17. Young, Jeffrey T., 1991. "Is the entropy law relevant to the economics of natural resource scarcity?," Journal of Environmental Economics and Management, Elsevier, vol. 21(2), pages 169-179, September.
    18. James Andreoni & Arik Levinson, 1998. "The Simple Analytics of the Environmental Kuznets Curve," NBER Working Papers 6739, National Bureau of Economic Research, Inc.
    19. Solow, Robert M., 1997. "Georgescu-Roegen versus Solow-Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 267-268, September.
    20. Sinn, Hans-Werner, 2008. "Public policies against global warming: A supply side approach," Munich Reprints in Economics 19638, University of Munich, Department of Economics.
    21. Ayres, Robert U. & Warr, Benjamin, 2005. "Accounting for growth: the role of physical work," Structural Change and Economic Dynamics, Elsevier, vol. 16(2), pages 181-209, June.
    22. Larry E. Jones & Rodolfo E. Manuelli, 2000. "Endogenous policy choice: the case of pollution and growth," Staff Report 276, Federal Reserve Bank of Minneapolis.
    23. Roger Fouquet & Peter J.G. Pearson, 2012. "The Long Run Demand for Lighting:Elasticities and Rebound Effects in Different Phases of Economic Development," Economics of Energy & Environmental Policy, International Association for Energy Economics, vol. 0(Number 1).
    24. Robert M. Solow, 1994. "Perspectives on Growth Theory," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 45-54, Winter.
    25. Cole, M.A. & Rayner, A.J. & Bates, J.M., 1997. "The environmental Kuznets curve: an empirical analysis," Environment and Development Economics, Cambridge University Press, vol. 2(04), pages 401-416, November.
    26. Cees Withagen, 1995. "Pollution, abatement and balanced growth," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 5(1), pages 1-8, January.
    27. Geoffrey Heal, 2011. "Sustainability and its Measurement," NBER Working Papers 17008, National Bureau of Economic Research, Inc.
    28. Nordhaus, William D, 1973. "World Dynamics: Measurement Without Data," Economic Journal, Royal Economic Society, vol. 83(332), pages 1156-83, December.
    29. Bruvoll, Annegrete & Glomsrod, Solveig & Vennemo, Haakon, 1999. "Environmental drag: evidence from Norway," Ecological Economics, Elsevier, vol. 30(2), pages 235-249, August.
    30. Weitzman Martin L., 1994. "On the Environmental Discount Rate," Journal of Environmental Economics and Management, Elsevier, vol. 26(2), pages 200-209, March.
    31. Bengt Kristrom & Pere Riera, 1996. "Is the income elasticity of environmental improvements less than one?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 7(1), pages 45-55, January.
    32. 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.
    33. Beverly Hirtle, 2008. "Credit derivatives and bank credit supply," Staff Reports 276, Federal Reserve Bank of New York.
    34. William D. Nordhaus, 1992. "Lethal Model 2: The Limits to Growth Revisited," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(2), pages 1-60.
    35. Clark, Colin W., 1997. "Renewable resources and economic growth," Ecological Economics, Elsevier, vol. 22(3), pages 275-276, September.
    36. Daly, Herman E., 1992. "Is the entropy law relevant to the economics of natural resource scarcity?-- yes, of course it is!," Journal of Environmental Economics and Management, Elsevier, vol. 23(1), pages 91-95, July.
    37. Townsend, Kenneth N., 1992. "Is the entropy law relevant to the economics of natural resource scarcity? Comment," Journal of Environmental Economics and Management, Elsevier, vol. 23(1), pages 96-100, July.
    38. Graham M Turner, 2008. "A Comparison of the Limits to Growth with Thirty Years of Reality," Socio-Economics and the Environment in Discussion (SEED) Working Paper Series 2008-09, CSIRO Sustainable Ecosystems.
    39. Weitzman, Martin L, 1996. "Hybridizing Growth Theory," American Economic Review, American Economic Association, vol. 86(2), pages 207-12, May.
    40. Paul M. Romer, 1994. "The Origins of Endogenous Growth," Journal of Economic Perspectives, American Economic Association, vol. 8(1), pages 3-22, Winter.
    41. Dieter Helm, 2011. "Peak oil and energy policy--a critique," Oxford Review of Economic Policy, Oxford University Press, vol. 27(1), pages 68-91, Spring.
    42. Shafik, Nemat, 1994. "Economic Development and Environmental Quality: An Econometric Analysis," Oxford Economic Papers, Oxford University Press, vol. 46(0), pages 757-73, Supplemen.
    43. Daly, Herman E., 1997. "Georgescu-Roegen versus Solow/Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 261-266, September.
    44. Grimaud, Andre, 1999. "Pollution Permits and Sustainable Growth in a Schumpeterian Model," Journal of Environmental Economics and Management, Elsevier, vol. 38(3), pages 249-266, November.
    45. Homi Kharas, 2010. "The Emerging Middle Class in Developing Countries," OECD Development Centre Working Papers 285, OECD Publishing.
    46. Selden Thomas M. & Song Daqing, 1994. "Environmental Quality and Development: Is There a Kuznets Curve for Air Pollution Emissions?," Journal of Environmental Economics and Management, Elsevier, vol. 27(2), pages 147-162, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Lists

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    Statistics

    Access and download statistics

    Corrections

    When requesting a correction, please mention this item's handle: RePEc:lsg:lsgwps:wp93. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (The GRI Administration).

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.