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Technology, development, and the environment

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  • Fisher-Vanden, Karen
  • Ho, Mun S.

Abstract

In an attempt to achieve the positive externalities from a more knowledge-intensive economy, many developing countries have emphasized improvements in their science and technology (S&T) capabilities. China, in particular, has been experiencing an acceleration in its R&D intensity, causing many to wonder whether China is undergoing an S&T takeoff. In this paper, we simulate the effects of an S&T takeoff using a model of China that incorporates econometric estimates from 1500 industrial enterprises in China. We find that an S&T takeoff will lead to lower goods prices overall, but a larger drop in energy prices due to the energy-saving bias of R&D. The outcome is higher capital investment and economic growth; a substitution of energy for other factors of production; and greater energy consumption by households. Our findings underscore the importance of considering the economy-wide implications of a technology policy, recognizing that better technology does not necessarily imply a cleaner environment.

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  • Fisher-Vanden, Karen & Ho, Mun S., 2010. "Technology, development, and the environment," Journal of Environmental Economics and Management, Elsevier, vol. 59(1), pages 94-108, January.
    • Handle: RePEc:eee:jeeman:v:59:y:2010:i:1:p:94-108
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    6. Cui, Cathy Xin & Ha, Soo Jung & Hanley, Nicholas & McGregor, Peter G & Turner, Karen & Yin, Ya Ping, 2011. "Productivity Growth, Decoupling and Pollution Leakage," Stirling Economics Discussion Papers 2011-13, University of Stirling, Division of Economics.
    7. Rout, Ullash K. & Akimoto, Keigo & Sano, Fuminori & Tomoda, Toshimasa, 2010. "Introduction of subsidisation in nascent climate-friendly learning technologies and evaluation of its effectiveness," Energy Policy, Elsevier, vol. 38(1), pages 520-532, January.
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