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Funding for green growth

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  • Fuentes Castro, D.

Abstract

Welfare economics shows how innovation and cost control are necessary to correct the negative externalities of production and consumption patterns to ensure a path of sustainable growth. When welfare economics describes the fundamentals of green growth, with innovation as a cornerstone for the management of externalities, it does not confront the financial aspects of the problem. However, the transformation of the economy towards more environmentally friendly practices requires significant investments, and their financing is likely to constitute, in practice, a bottleneck. Thus, it is not excluded that economically beneficial investments that would be capable of generating growth do not emerge because of a lack of funding. This study reviews the main findings of the literature in this regard and shows the different types of actions that may be considered by public authorities to remove this obstacle. In France, public support for green growth occurs through two main sets of measures. On the one hand, the investments related to the implementation of the Grenelle Environment Forum and, secondly, through some programs included in the "Investing for the Future" program. This study examines, also, the two annual reports on the Environment commitments that have been submitted to Parliament in 2009 and 2010 and the work done to date to assess its impact on growth. Regarding the "Investing for the Future" program, the study analyzes the investment programs by institution in charge, the timing of commitments and the private sector participation.

Suggested Citation

  • Fuentes Castro, D., 2012. "Funding for green growth," Working papers 392, Banque de France.
  • Handle: RePEc:bfr:banfra:392
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    File URL: https://publications.banque-france.fr/sites/default/files/medias/documents/working-paper_392_2012.pdf
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    References listed on IDEAS

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    1. M. L. Weitzman, 1973. "Prices vs. Quantities," Working papers 106, Massachusetts Institute of Technology (MIT), Department of Economics.
    2. Alain de Serres & Fabrice Murtin & Giuseppe Nicoletti, 2010. "A Framework for Assessing Green Growth Policies," OECD Economics Department Working Papers 774, OECD Publishing.
    3. Ambec, Stefan & Barla, Philippe, 2001. "Productivité et réglementation environnementale: une analyse de l'hypothèse de Porter," Cahiers de recherche 0107, Université Laval - Département d'économique.
    4. Emmanuel Combet & Frédéric Ghersi & Jean Charles Hourcade, 2009. "Taxe carbone, une mesure socialement régressive ? Vrais problèmes et faux débats," CIRED Working Papers hal-00866409, HAL.
    5. Martin L. Weitzman, 1974. "Prices vs. Quantities," Review of Economic Studies, Oxford University Press, vol. 41(4), pages 477-491.
    6. Roger Guesnerie, 2004. "Calcul économique et développement durable," Revue économique, Presses de Sciences-Po, vol. 55(3), pages 363-382.
    7. Mireille Chiroleu-Assouline, 2001. "Le double dividende. Les approches théoriques," Revue Française d'Économie, Programme National Persée, vol. 16(2), pages 119-147.
    8. Terkla, David, 1984. "The efficiency value of effluent tax revenues," Journal of Environmental Economics and Management, Elsevier, vol. 11(2), pages 107-123, June.
    9. de Bovenberg, A Lans & Mooij, Ruud A, 1994. "Environmental Levies and Distortionary Taxation," American Economic Review, American Economic Association, pages 1085-1089.
    10. Pearce, David W, 1991. "The Role of Carbon Taxes in Adjusting to Global Warming," Economic Journal, Royal Economic Society, vol. 101(407), pages 938-948, July.
    11. Baumol,William J. & Oates,Wallace E., 1988. "The Theory of Environmental Policy," Cambridge Books, Cambridge University Press, number 9780521322249, November.
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    Cited by:

    1. Barthélemy, J. & Marx, M., 2012. "Generalizing the Taylor Principle: New Comment," Working papers 403, Banque de France.

    More about this item

    Keywords

    Green Growth; Externalities; Sustainable Development; Grenelle Environment Forum; Investing for the Future; Accounts for the Environment.;

    JEL classification:

    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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