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Economic Growth and the Diffusion of Clean Technologies: Explaining Environmental Kuznets Curves

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  • Sjak Smulders
  • Lucas Bretschger
  • Hannes Egli

Abstract

The paper provides a theoretical explanation for the inverted U-shaped relation between pollution and income often found in empirical research (Environmental Kuznets Curve). We model the transition in the pollution pattern as a change in general purpose technologies and investigate how it interferes with economic growth driven by quality improvements. We provide an analytical foundation for the claim that the rise and decline of pollution can be explained by endogenous innovations, policy-induced technology shifts, and intrasectoral changes. Once environmental degradation becomes too severe, regulation is introduced by which society forces the economy to make a transition to cleaner production. Copyright Springer Science+Business Media B.V. 2011

Suggested Citation

  • Sjak Smulders & Lucas Bretschger & Hannes Egli, 2011. "Economic Growth and the Diffusion of Clean Technologies: Explaining Environmental Kuznets Curves," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 49(1), pages 79-99, May.
    • Handle: RePEc:kap:enreec:v:49:y:2011:i:1:p:79-99
    DOI: 10.1007/s10640-010-9425-y
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    More about this item

    Keywords

    Environmental Kuznets curve; General purpose technology; Growth; Intrasectoral shifts; Q20; O41; Q56;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q56 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environment and Development; Environment and Trade; Sustainability; Environmental Accounts and Accounting; Environmental Equity; Population Growth

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