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Technological vs. Ecological Switch and the Environmental Kuznets Curve

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  • Raouf Boucekkine
  • Aude Pommeret
  • Fabien Prieur

Abstract

We consider an optimal technology adoption AK model in line with Boucekkine Krawczyk and Vallée (2011): an economy, caring about consumption and pollution as well, starts with a given technological regime and may decide to switch at any moment to a cleaner technology at a given permanent or transitory output cost. At the same time, we posit that there exists a pollution threshold above which the assimilation capacity of Nature goes down, featuring a kind of irreversible ecological regime. We study how ecological irreversibility interacts with the ingredients of the latter optimal technological switch problem, with a special attention to induced capital-pollution relationship. We find that if a single technological switch is optimal, one recovers the Environmental Kuznets Curve provided initial pollution is high enough. If exceeding the ecological threshold is optimal, then the latter configuration is far from being the rule.
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  • Raouf Boucekkine & Aude Pommeret & Fabien Prieur, 2013. "Technological vs. Ecological Switch and the Environmental Kuznets Curve," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 95(2), pages 252-260.
  • Handle: RePEc:oup:ajagec:v:95:y:2013:i:2:p:252-260
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    File URL: http://hdl.handle.net/10.1093/ajae/aas048
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    Cited by:

    1. Bonneuil, N. & Boucekkine, R., 2016. "Optimal transition to renewable energy with threshold of irreversible pollution," European Journal of Operational Research, Elsevier, vol. 248(1), pages 257-262.
    2. Raouf Boucekkine & Aude Pommeret & Fabien Prieur, 2012. "Optimal Regime Switching and Threshold Effects: Theory and Application to a Resource Extraction Problem under Irreversibility," Working Papers 12-14, LAMETA, Universtiy of Montpellier, revised May 2012.
    3. Prieur, Fabien & Tidball, Mabel & Withagen, Cees, 2013. "Optimal emission-extraction policy in a world of scarcity and irreversibility," Resource and Energy Economics, Elsevier, vol. 35(4), pages 637-658.
    4. Zon, Adriaan van, 2016. "On the optimum timing of the global carbon-transition under conditions of extreme weather-related damages: further green paradoxical results," MERIT Working Papers 010, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    5. Daria Onori, 2015. "Optimal Growth and Debt Dynamics under GDP-Based Collaterals," Working Papers halshs-01251352, HAL.
    6. Raouf Boucekkine & Fouad El Ouardighi, 2015. "Optimal Growth with Polluting Waste and Recycling," Working Papers halshs-01126636, HAL.
    7. Raouf Boucekkine & Blanca Martinez & Ramon Ruiz-Tamarit, 2013. "Optimal Sustainable Policies under Pollution Ceiling: The Demographic Side," AMSE Working Papers 1354, Aix-Marseille School of Economics, Marseille, France, revised 04 Nov 2013.
    8. Daria Onori, 2013. "Optimal Growth under Flow-Based Collaterals," Working Papers halshs-00824672, HAL.
    9. A. Mantovani & O. Tarola & C. Vergari, 2015. "Hedonic Quality and Social Norms: a hybrid model of product differentiation," Working Papers wp1029, Dipartimento Scienze Economiche, Universita' di Bologna.
    10. Supratim Das Gupta, 2015. "Dynamics of Switching from Polluting Resources to Green Technologies," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 1109-1124.
    11. Ngo Van Long & Fabien Prieur & Klarizze Puzon & Mabel Tidball, 2013. "Markov Perfect Equilibria in Differential Games with Regime Switching Strategies," Working Papers 13-06, LAMETA, Universtiy of Montpellier, revised Jan 2014.
    12. Boucekkine, R. & Pommeret, A. & Prieur, F., 2013. "Optimal regime switching and threshold effects," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2979-2997.
    13. Frank N. Caliendo & Aspen Gorry & Sita Slavov, 2015. "The Cost of Uncertainty about the Timing of Social Security Reform," NBER Working Papers 21585, National Bureau of Economic Research, Inc.

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