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Sustainable development with extractive and non-extractive use of the environment in production

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  • F. Butter
  • M. Hofkes

Abstract

This paper considers an economy in which the environment plays a role both in welfare and production. An endogenous growth model, which allows for abatement activities, is formulated in order to study the impact of pollution on welfare and long-term growth. Conditions for optimal and balanced economic growth are discussed and a numerical example is given to provide some insight in the mechanisms at work in the model. Copyright Kluwer Academic Publishers 1995

Suggested Citation

  • F. Butter & M. Hofkes, 1995. "Sustainable development with extractive and non-extractive use of the environment in production," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(4), pages 341-358, December.
  • Handle: RePEc:kap:enreec:v:6:y:1995:i:4:p:341-358 DOI: 10.1007/BF00691818
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    References listed on IDEAS

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    1. Bovenberg, A.L. & Smulders, S., 1993. "Environmental Quality and Pollution-Saving Technological Change in Two- Sector Endogenous Growth Model," Papers 9321, Tilburg - Center for Economic Research.
    2. Martin L. Weitzman, 1976. "On the Welfare Significance of National Product in a Dynamic Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 90(1), pages 156-162.
    3. Hartwick, John M., 1990. "Natural resources, national accounting and economic depreciation," Journal of Public Economics, Elsevier, vol. 43(3), pages 291-304, December.
    4. Casey B. Mulligan & Xavier Sala-i-Martin, 1993. "Transitional Dynamics in Two-Sector Models of Endogenous Growth," The Quarterly Journal of Economics, Oxford University Press, vol. 108(3), pages 739-773.
    5. Rebelo, Sergio, 1991. "Long-Run Policy Analysis and Long-Run Growth," Journal of Political Economy, University of Chicago Press, vol. 99(3), pages 500-521, June.
    6. Hofkes, M.W., 1993. "Sustainability in one and two sector endogenous growth models : a note," Serie Research Memoranda 0052, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
    7. Raymond Gradus & Sjak Smulders, 1993. "The trade-off between environmental care and long-term growth—Pollution in three prototype growth models," Journal of Economics, Springer, vol. 58(1), pages 25-51, February.
    8. Gruver, Gene W., 1976. "Optimal investment in pollution control capital in a neoclassical growth context," Journal of Environmental Economics and Management, Elsevier, vol. 3(3), pages 165-177, October.
    9. F. Butter & H. Verbruggen, 1994. "Measuring the trade-off between economic growth and a clean environment," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(2), pages 187-208, April.
    10. Keeler, Emmett & Spence, Michael & Zeckhauser, Richard, 1972. "The optimal control of pollution," Journal of Economic Theory, Elsevier, vol. 4(1), pages 19-34, February.
    11. Tahvonen, Olli & Kuuluvainen, Jari, 1991. "Optimal growth with renewable resources and pollution," European Economic Review, Elsevier, vol. 35(2-3), pages 650-661, April.
    12. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
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    Citations

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    Cited by:

    1. Gerlagh, Reyer & Lise, Wietze, 2005. "Carbon taxes: A drop in the ocean, or a drop that erodes the stone? The effect of carbon taxes on technological change," Ecological Economics, Elsevier, vol. 54(2-3), pages 241-260, August.
    2. Hofkes, Marjan W., 1996. "Modelling sustainable development: An economy-ecology integrated model," Economic Modelling, Elsevier, vol. 13(3), pages 333-353, July.
    3. Reyer Gerlagh & Marjan W. Hofkes, 2004. "Time Profile of Climate Change Stabilization Policy," Working Papers 2004.139, Fondazione Eni Enrico Mattei.
    4. Chen, Jhy-hwa & Shieh, Jhy-yuan & Chang, Juin-jen & Lai, Ching-chong, 2009. "Growth, welfare and transitional dynamics in an endogenously growing economy with abatement labor," Journal of Macroeconomics, Elsevier, vol. 31(3), pages 423-437, September.
    5. Dagmar Nelissen & Till Requate, 2007. "Pollution-reducing and resource-saving technological progress," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 6(1), pages 5-44.
    6. Lans Bovenberg, A. & de Mooij, Ruud A., 1997. "Environmental tax reform and endogenous growth," Journal of Public Economics, Elsevier, pages 207-237.
    7. Shieh, Jhy-yuan & Chen, Jhy-hwa & Chang, Shu-hua & Lai, Ching-chong, 2014. "Environmental consciousness, economic growth, and macroeconomic instability," International Review of Economics & Finance, Elsevier, vol. 34(C), pages 151-160.
    8. Sjak Smulders, 1995. "Entropy, environment, and endogenous economic growth," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 2(2), pages 319-340, August.
    9. Donna Ramirez Harrington & Madhu Khanna & David Zilberman, 2005. "Conservation capital and sustainable economic growth," Oxford Economic Papers, Oxford University Press, vol. 57(2), pages 336-359, April.
    10. GERLAGH Reyer & LISE Wietze, "undated". "Induced Technological Change under Carbon Taxes," EcoMod2003 330700062, EcoMod.
    11. Gerlagh, Reyer, 2008. "A climate-change policy induced shift from innovations in carbon-energy production to carbon-energy savings," Energy Economics, Elsevier, vol. 30(2), pages 425-448, March.
    12. Reyer Gerlagh, 2004. "A Climate-Change Policy Induced Shift from Innovations in Energy Production to Energy Savings," Working Papers 2004.128, Fondazione Eni Enrico Mattei.

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