Introduction

In this chapter, the outline of this book is explained based on a survey of previous research. Sustainable development (SD) is assumed to be the coexistence of pollution reduction and economic growth. In the externality effect, improving environmental quality leads to economic growth by increasing total factor productivity. Via the distaste effect, SD is affected by the elasticity of intertemporal Substitution. Via the generation turnover effect, the transition from the older to the younger generations leads to SD through savings. Via the profitability effect, the price pass-through of environmental taxes enhances innovation and SD. The outline of this book is as follows. In Part I, the basic mechanisms of sustainable development and sustainable finance are discussed based on the variety expansion model. In Part II, households’ preferences such as leisure, social status and non-homothetic preferences determine the growth-enhancing effects. In Part III, the mechanism of pollution haven hypothesis and sustainable tourism are discussed. In Part IV, the impact of corruption and tax evasion on the growth-enhancing effect is explained. In Part V, Porter hypothesis and the impact of environmental policies on SD through industrial structure is discussed. In the conclusion, a summary of the book and future prospects are discussed.