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Should we replace the environment?: Limits of economic growth in the presence of self-protective choices

Author

Listed:
  • Angelo Antoci
  • Simone Borghesi
  • Marcello Galeotti

Abstract

Purpose - To protect against the increasing environmental degradation many agents choose today to replace consumption of depleted environmental goods with that of privately produced substitute goods. The present paper aims to highlight how this “self-protective” behaviour that is increasingly frequent in modern societies may affect the welfare of the individuals. Design/methodology/approach - The paper presents a combination of narrative with argument and analysis. It first provides several examples of self-protective choices to give a heuristic view of this phenomenon and then examines their effects through a simple evolutionary model that leads the reader beyond a purely intuitive understanding of the substitution mechanism described in the first part. Findings - The paper shows that replacing environmental goods with artificial substitute goods may give rise to an “undesiderable growth” process, that is, a vicious circle between environmental degradation and private consumption which contributes to economic growth but may have negative effects on the welfare of the agents. Originality/value - The paper investigates an aspect of the link between environmental degradation and economic growth that has been mainly ignored in the literature so far. While most contributions have underlined that self-protective choices can boost economic growth, the paper goes one step forward and shows that they can actually give rise to a self-reinforcing growth process in which environmental degradation increases economic growth and viceversa, leading the economy on a welfare-reducing path.

Suggested Citation

  • Angelo Antoci & Simone Borghesi & Marcello Galeotti, 2008. "Should we replace the environment?: Limits of economic growth in the presence of self-protective choices," International Journal of Social Economics, Emerald Group Publishing, vol. 35(4), pages 283-297, March.
  • Handle: RePEc:eme:ijsepp:v:35:y:2008:i:4:p:283-297
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    Citations

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    Cited by:

    1. Antoci, Angelo & Borghesi, Simone & Russu, Paolo, 2012. "Environmental protection mechanisms and technological dynamics," Economic Modelling, Elsevier, vol. 29(3), pages 840-847.
    2. Antoci, Angelo & Borghesi, Simone & Russu, Paolo & Ticci, Elisa, 2015. "Foreign direct investments, environmental externalities and capital segmentation in a rural economy," Ecological Economics, Elsevier, vol. 116(C), pages 341-353.
    3. Antoci, Angelo & Borghesi, Simone, 2012. "Preserving or escaping? On the welfare effects of environmental self-protective choices," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(2), pages 248-254.
    4. Antoci, Angelo, 2009. "Environmental degradation as engine of undesirable economic growth via self-protection consumption choices," Ecological Economics, Elsevier, vol. 68(5), pages 1385-1397, March.
    5. Antoci, Angelo & Russu, Paolo & Ticci, Elisa, 2008. "Structural change, economic growth and environmental dynamics with heterogeneous agents," MPRA Paper 13668, University Library of Munich, Germany.
    6. Angelo Antoci & Simone Borghesi, 2010. "Environmental degradation, self-protection choices and coordination failures in a North–South evolutionary model," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 5(1), pages 89-107, June.
    7. Antoci, Angelo & Sodini, Mauro, 2009. "Indeterminacy, bifurcations and chaos in an overlapping generations model with negative environmental externalities," MPRA Paper 13750, University Library of Munich, Germany.

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