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Climate Protection versus Economic Convergence?

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  • Lengwiler, Yvan

    (University of Basel)

Abstract

Global economic convergence and protection of the climate are both worthwhile goals. Yet, there is an inherent tension between them. Greenhouse gases are a waste product that is often emitted in the production process. Limiting such emissions therefore hampers the accumulation of income and capital. I expand Solow's growth model to accommodate green house gases, and use this to estimate the contribution of such emissions to economic development. The sobering insight is that we would not have witnessed any convergence in the last 45 years if poorer countries had not increased greenhouse gas emissions.

Suggested Citation

  • Lengwiler, Yvan, 2021. "Climate Protection versus Economic Convergence?," Working papers 2021/12, Faculty of Business and Economics - University of Basel.
    • Handle: RePEc:bsl:wpaper:2021/12
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    References listed on IDEAS

    as
    1. Grossman, G.M & Krueger, A.B., 1991. "Environmental Impacts of a North American Free Trade Agreement," Papers 158, Princeton, Woodrow Wilson School - Public and International Affairs.
    2. William D. Nordhaus, 1992. "Lethal Model 2: The Limits to Growth Revisited," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 23(2), pages 1-60.
    3. Moomaw, William R. & Unruh, Gregory C., 1997. "Are environmental Kuznets curves misleading us? The case of CO2 emissions," Environment and Development Economics, Cambridge University Press, vol. 2(4), pages 451-463, November.
    4. Kacprzyk, Andrzej & Kuchta, Zbigniew, 2020. "Shining a new light on the environmental Kuznets curve for CO2 emissions," Energy Economics, Elsevier, vol. 87(C).
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    climate change; convergence; growth theory; growth accounting; green house gases; GHG; carbon emissions; pollution; poverty; natural resources.;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth

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