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Sustainability Policy and Environmental Policy

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  • John C. V. Pezzey

Abstract

A theoretical, representative-agent economy with a depletable resource stock, polluting emissions and productive capital is used to contrast environmental policy, which internalises externalised environmental values, with sustainability policy, which achieves some form of intergenerational equity. The obvious environmental policy comprises an emissions tax and a resource stock subsidy, each equal to the respective external cost or benefit. Sustainability policy comprises an incentive affecting the choice between consumption and investment, and can be a consumption tax, capital subsidy or investment subsidy, or a combination thereof. Environmental policy can reduce the strength of the sustainability policy needed. More specialised results are derived in a small open economy with no environmental effects on utility. Copyright The editors of the "Scandinavian Journal of Economics", 2004 .

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  • John C. V. Pezzey, 2004. "Sustainability Policy and Environmental Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(2), pages 339-359, June.
  • Handle: RePEc:bla:scandj:v:106:y:2004:i:2:p:339-359
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    Cited by:

    1. Alessio Emanuele BIONDO, 2010. "A Growth Rate for a Sustainable Economy," Journal of Applied Economic Sciences, Spiru Haret University, Faculty of Financial Management and Accounting Craiova, vol. 5(2(12)/Sum), pages 7-20.
    2. repec:eee:ecolec:v:143:y:2018:i:c:p:286-293 is not listed on IDEAS
    3. Cairns, Robert D., 2008. "Value and income," Ecological Economics, Elsevier, vol. 66(2-3), pages 417-424, June.
    4. Andrei V. Bazhanov, 2008. "Maximin-optimal sustainable growth with nonrenewable resource and externalities," EERI Research Paper Series EERI_RP_2008_11, Economics and Econometrics Research Institute (EERI), Brussels.
    5. Alvarez-Cuadrado, Francisco & Van Long, Ngo, 2009. "A mixed Bentham-Rawls criterion for intergenerational equity: Theory and implications," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 154-168, September.
    6. Bazhanov, Andrei, 2008. "Sustainable growth in a resource-based economy: the extraction-saving relationship," MPRA Paper 12350, University Library of Munich, Germany.
    7. Dimitra Vouvaki & Anastasios Xepapadeas, 2005. "Criteria for Assessing Sustainable Development: Theoretical Issues and Empirical Evidence for the Case of Greece," Working Papers 0511, University of Crete, Department of Economics.
    8. Bazhanov, Andrei, 2008. "Sustainable growth: The extraction-saving relationship," MPRA Paper 9911, University Library of Munich, Germany.
    9. Smulders, J.A., 2005. "Endogenous technological change, natural resources and growth," Other publications TiSEM d6e27500-7604-420f-9961-4, Tilburg University, School of Economics and Management.
    10. Bazhanov, Andrei V., 2010. "Sustainable growth: Compatibility between a plausible growth criterion and the initial state," Resources Policy, Elsevier, vol. 35(2), pages 116-125, June.
    11. Xuedong Liang & Weiwei Zhang & Lei Chen & Fumin Deng, 2016. "Sustainable Urban Development Capacity Measure—A Case Study in Jiangsu Province, China," Sustainability, MDPI, Open Access Journal, vol. 8(3), pages 1-13, March.
    12. repec:gam:jsusta:v:8:y:2016:i:3:p:270:d:66112 is not listed on IDEAS
    13. Vouvaki, Dimitra & Xepapadeas, Anastasios, 2008. "Changes in social welfare and sustainability: Theoretical issues and empirical evidence," Ecological Economics, Elsevier, vol. 67(3), pages 473-484, October.
    14. Bazhanov, Andrei, 2008. "Maximin-optimal sustainable growth in a resource-based imperfect economy," MPRA Paper 16245, University Library of Munich, Germany, revised 13 Jul 2009.
    15. Bazhanov, Andrei, 2008. "Sustainable growth: Compatibility between criterion and the initial state," MPRA Paper 9914, University Library of Munich, Germany.
    16. John C. V. Pezzey, 2004. "Sustainability Policy and Environmental Policy," Scandinavian Journal of Economics, Wiley Blackwell, vol. 106(2), pages 339-359, June.
    17. Valente, Simone, 2011. "Intergenerational externalities, sustainability and welfare—The ambiguous effect of optimal policies on resource depletion," Resource and Energy Economics, Elsevier, vol. 33(4), pages 995-1014.
    18. Hoberg, Nikolai & Baumgärtner, Stefan, 2017. "Irreversibility and uncertainty cause an intergenerational equity-efficiency trade-off," Ecological Economics, Elsevier, vol. 131(C), pages 75-86.
    19. Robert D. Cairns, 2011. "Accounting for Sustainability: A Dissenting Opinion," Sustainability, MDPI, Open Access Journal, vol. 3(9), pages 1-16, August.
    20. repec:taf:rjapxx:v:11:y:2006:i:2:p:151-167 is not listed on IDEAS
    21. Bazhanov, Andrei, 2008. "Inconsistency between a criterion and the initial conditions," MPRA Paper 6792, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • H30 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - General
    • O23 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Fiscal and Monetary Policy in Development
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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