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Climate Protection versus Economic Convergence?

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  • Lengwiler, Yvan

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

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    JEL classification:

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

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