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On Green Growth with Sustainable Capital

Author

Listed:
  • Parantap Basu

    (Durham University Business School, Durham University)

  • Tooraj Jamasb

    (Copenhagen Business School)

Abstract

We develop an endogenous growth model to address a long standing question whether sustainable green growth is feasible by re-allocating resource use between green (natural) and man-made (carbon intensive) capital. In our model, final output is produced with two reproducible inputs, green and man-made capital. The growth of the man-made capital causes depreciation of green capital via carbon emissions which the private sector does not internalize. A benevolent government uses carbon taxes to encourage Örms to substitute carbon intensive man-made capital with green capital that the production technology allows. Doing so, the damage to natural capital by emissions can be reversed through a lower, but socially optimal long run growth. This trade-off between environmental policy and long-run growth can be overcome by a combination of an investment in pollution abatement and higher total factor productivity
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Parantap Basu & Tooraj Jamasb, 2020. "On Green Growth with Sustainable Capital," Working Papers EPRG2011, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    • Handle: RePEc:enp:wpaper:eprg2011
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    Cited by:

    1. Murphy, Erin L. & Bernard, Miranda & Gerber, Leah R. & Dooley, Kevin J., 2021. "Evaluating the role of market-based instruments in protecting marine ecosystem services in wild-caught fisheries," Ecosystem Services, Elsevier, vol. 51(C).
    2. Robbie Maris & Mark Holmes, 2023. "Economic Growth Theory and Natural Resource Constraints: A Stocktake and Critical Assessment," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 56(2), pages 255-268, June.
    3. Surana, Kavita & Singh, Anuraag & Sagar, Ambuj D, 2020. "Strengthening science, technology, and innovation-based incubators to help achieve Sustainable Development Goals: Lessons from India," Technological Forecasting and Social Change, Elsevier, vol. 157(C).
    4. Natalia P Montoya & Lia C O B Glaz & César C C Abad & Lucas A Pereira & Irineu Loturco, 2020. "What teachers need to know and be able to do: A view from teachers, students, and principals in the Brazilian context," PLOS ONE, Public Library of Science, vol. 15(9), pages 1-12, September.
    5. Vogt, Christine A. & Andereck, Kathleen L. & Pham, Kim, 2020. "Designing for quality of life and sustainability," Annals of Tourism Research, Elsevier, vol. 83(C).
    6. Jan Kovanda, 2021. "Economy‐wide material system analysis: Mapping material flows through the economy," Journal of Industrial Ecology, Yale University, vol. 25(5), pages 1121-1135, October.
    7. Zaiton Hassan & Norhayati Hussin & Hasnah Hashim & Nurul Syfa Mohd Tokiran, 2020. "Information Seeking in Knowledge Society: Choose Right from Wrong," International Journal of Asian Social Science, Asian Economic and Social Society, vol. 10(3), pages 151-158, March.

    More about this item

    Keywords

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    JEL classification:

    • E1 - Macroeconomics and Monetary Economics - - General Aggregative Models
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
    • Q2 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation

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