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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.

Suggested Citation

  • 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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    References listed on IDEAS

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    Citations

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    Cited by:

    1. Rout, Ullash K. & Blesl, Markus & Fahl, Ulrich & Remme, Uwe & Voß, Alfred, 2009. "Uncertainty in the learning rates of energy technologies: An experiment in a global multi-regional energy system model," Energy Policy, Elsevier, vol. 37(11), pages 4927-4942, November.
    2. Arthur A. van Benthem, 2015. "Energy Leapfrogging," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 2(1), pages 93-132.
    3. 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.
    4. Lim, Jong-Soo & Kim, Yong-Gun, 2012. "Combining carbon tax and R&D subsidy for climate change mitigation," Energy Economics, Elsevier, vol. 34(S3), pages 496-502.
    5. Bouwe R. Dijkstra & Anuj J. Mathew, "undated". "Liberalizing Trade in Environmental Goods," Discussion Papers 10/05, University of Nottingham, GEP.
    6. Koesler, Simon & Swales, Kim & Turner, Karen, 2014. "Beyond national economy-wide rebound effects: An applied general equilibrium analysis incorporating international spillover effects," ZEW Discussion Papers 14-025, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
    7. Turner, Karen & Hanley, Nick, 2011. "Energy efficiency, rebound effects and the environmental Kuznets Curve," Energy Economics, Elsevier, vol. 33(5), pages 709-720, September.
    8. Karen Turner, 2013. ""Rebound" Effects from Increased Energy Efficiency: A Time to Pause and Reflect," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    9. 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.
    10. Douglas, Stratford & Nishioka, Shuichiro, 2012. "International differences in emissions intensity and emissions content of global trade," Journal of Development Economics, Elsevier, vol. 99(2), pages 415-427.
    11. Krissoff, Barry & Ballenger, Nicole & Dunmore, John C. & Gray, Denice, 1996. "Exploring Linkages Among Agriculture, Trade, and the Environment: Issues for the Next Century," Agricultural Economics Reports 33961, United States Department of Agriculture, Economic Research Service.
    12. Koesler, Simon & Swales, Kim & Turner, Karen, 2016. "International spillover and rebound effects from increased energy efficiency in Germany," Energy Economics, Elsevier, vol. 54(C), pages 444-452.
    13. George E. Halkos & Nickolaos G. Tzeremes, 2011. "Growth and environmental pollution: empirical evidence from China," Journal of Chinese Economic and Foreign Trade Studies, Emerald Group Publishing, vol. 4(3), pages 144-157, October.
    14. Popp, David, 2012. "The role of technological change in green growth," Policy Research Working Paper Series 6239, The World Bank.
    15. Witajewski-Baltvilks, Jan & Verdolini, Elena & Tavoni, Massimo, 2015. "Bending the learning curve," Energy Economics, Elsevier, vol. 52(S1), pages 86-99.
    16. Bouwe R. Dijkstra & Anuj J. Mathew, 2016. "Liberalizing trade in environmental goods and services," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 18(4), pages 499-526, October.

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