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A Dynamic Model of the Environmental Kuznets Curve : Turning Point and Public Poliy

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Abstract

We set up a simple dynamic macroeconomic model with (i) polluting consump- tion and a preference for a clean environment, (ii) increasing returns in abate- ment giving rise to an EKC and (iii) sustained growth resulting from a linear final-output technology. The model captures two sorts of market failures caused by external effects associated with consumption and environmental effort. This model is employed to investigate the determinants of the turning point and the (relative) effectiveness of different public policy measures aimed at a reduction of the environmental burden. Moreover, the model offers a potential explana- tion of an N-shaped pollution-income relation. Finally, it is shown that the model is compatible with most empirical regularities on economic growth and the environment.

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  • Hannes Egli & Thomas M. Steger, 2004. "A Dynamic Model of the Environmental Kuznets Curve : Turning Point and Public Poliy," CER-ETH Economics working paper series 04/33, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich, revised May 2005.
  • Handle: RePEc:eth:wpswif:04-33
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    Cited by:

    1. Nicole Grunewald & Inmaculada Martínez-Zarzoso, 2009. "Driving Factors of Carbon Dioxide Emissions and the Impact from Kyoto Protocol," Ibero America Institute for Econ. Research (IAI) Discussion Papers 190, Ibero-America Institute for Economic Research.
    2. Hannes Egli, 2005. "A New Approach to Pollution Modelling in Models of the Environmental Kuznets Curve," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 141(III), pages 459-473, September.
    3. Strulik, Holger, 2017. "Hyperbolic discounting and the time-consistent solution of three canonical environmental problems," Center for European, Governance and Economic Development Research Discussion Papers 319, University of Goettingen, Department of Economics.
    4. Lucas Bretschger & Sjak Smulders, 2007. "Sustainable Resource Use and Economic Dynamics," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(1), pages 1-13, January.
    5. Jeyhun I. Mikayilov & Marzio Galeotti & Fakhri J. Hasanov, 2018. "The Impact of Economic Growth on CO2 Emissions in Azerbaijan," IEFE Working Papers 102, IEFE, Center for Research on Energy and Environmental Economics and Policy, Universita' Bocconi, Milano, Italy.
    6. Lucas Bretschger, 2010. "Sustainability economics, resource efficiency, and the Green New Deal," International Economics and Economic Policy, Springer, vol. 7(2), pages 187-202, August.
    7. Massimiliano Mazzanti & Antonio Musolesi, 2010. "Carbon Abatement Leaders and Laggards Non Parametric Analyses of Policy Oriented Kuznets Curves," Working Papers 2010.149, Fondazione Eni Enrico Mattei.
    8. Ching-Yao Irene Lai & C.C. Yang, 2014. "Scale Effect Versus Induced Policy Response In The Environmental Kuznets Curve: The Case Of U.S. Water Pollution," Contemporary Economic Policy, Western Economic Association International, vol. 32(2), pages 435-450, April.

    More about this item

    Keywords

    Environmental Kuznets Curve; Pollution; Abatement; External Ef- fects; Economic Growth; Public Policy;

    JEL classification:

    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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