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Reconsidering The Impact of Environment on Long-Run Growth When Pollution Influences Health and Agents Have Finite-Lifetime

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  • Xavier Pautrel

    (Université de Nantes)

Abstract

Using an overlapping generation model à la Blanchard (1985) with human capital accumulation, this article demonstrates that the influence of environment on optimal growth in the long-run may be explained by the detrimental effect of pollution on life expectancy. It also shows that, in such a case, greener preferences are growth- and welfare-improving even if the ability of the agents to learn is independent to pollution and utility is additively separable. Finally, it establishes that it is possible to implement a win-win environmental policy.

Suggested Citation

  • Xavier Pautrel, 2006. "Reconsidering The Impact of Environment on Long-Run Growth When Pollution Influences Health and Agents Have Finite-Lifetime," Working Papers 2006.93, Fondazione Eni Enrico Mattei.
  • Handle: RePEc:fem:femwpa:2006.93
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    References listed on IDEAS

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    1. Markusen James R. & Morey Edward R. & Olewiler Nancy D., 1993. "Environmental Policy when Market Structure and Plant Locations Are Endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 24(1), pages 69-86, January.
    2. Javorcik Beata Smarzynska & Wei Shang-Jin, 2003. "Pollution Havens and Foreign Direct Investment: Dirty Secret or Popular Myth?," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 3(2), pages 1-34, December.
    3. Jean-Marie Grether & Jaime de Melo, 2003. "Globalization and Dirty Industries: Do Pollution Havens Matter?," NBER Working Papers 9776, National Bureau of Economic Research, Inc.
    4. Motta, Massimo & Thisse, Jacques-Francois, 1994. "Does environmental dumping lead to delocation?," European Economic Review, Elsevier, vol. 38(3-4), pages 563-576, April.
    5. Ulph, A. & Ulph, D., 1994. "Trade, strategic innovation and strategic environmental policy: a general analysis," Discussion Paper Series In Economics And Econometrics 9416, Economics Division, School of Social Sciences, University of Southampton.
    6. Beghin, John C. & Roland-Holst, David & Van der Mensbrugghe, Dominique, 1994. "Trade and Environment Nexus. Global Dimensions, The," Staff General Research Papers Archive 1589, Iowa State University, Department of Economics.
    7. Eskeland, Gunnar S. & Harrison, Ann E., 2003. "Moving to greener pastures? Multinationals and the pollution haven hypothesis," Journal of Development Economics, Elsevier, vol. 70(1), pages 1-23, February.
    8. J. Neary, 2006. "International Trade and the Environment: Theoretical and Policy Linkages," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 33(1), pages 95-118, January.
    9. Simpson, R. David & Bradford, Robert III, 1996. "Taxing Variable Cost: Environmental Regulation as Industrial Policy," Journal of Environmental Economics and Management, Elsevier, vol. 30(3), pages 282-300, May.
    10. Carraro, Carlo & Siniscaico, Domenico, 1994. "Environmental policy reconsidered: The role of technological innovation," European Economic Review, Elsevier, vol. 38(3-4), pages 545-554, April.
    11. Greaker, Mads, 2006. "Spillovers in the development of new pollution abatement technology: A new look at the Porter-hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 411-420, July.
    12. Ulph, Alistair Mitchell & Ulph, David, 1994. "Trade, Strategic Innovation and Strategic Environmental Policy - a General Analysis," CEPR Discussion Papers 1063, C.E.P.R. Discussion Papers.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Basseti, Thomas & Benos, Nikos & Karagiannis, Stelios, 2010. "How policy can influence human capital accumulation and environment quality," MPRA Paper 21754, University Library of Munich, Germany.
    2. Mouez Fodha & Thomas Seegmuller, 2014. "Environmental Quality, Public Debt and Economic Development," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 57(4), pages 487-504, April.
    3. Karine Constant & Natacha Raffin, 2016. "Environnement, croissance et inégalités : le rôle particulier du canal de la santé," Revue française d'économie, Presses de Sciences-Po, vol. 0(3), pages 9-29.
    4. Karine Constant, 2015. "Environmental Policy and Inequality: A Matter of Life and Death," Working Papers halshs-01174052, HAL.
    5. Xavier Pautrel, 2009. "Time-separable Utility, Leisure and Human Capital Accumulation: What New Implications for the Environment-Growth Nexus?," Working Papers 2009.104, Fondazione Eni Enrico Mattei.
    6. Xavier Pautrel, 2009. "Health-enhancing activities and the environment:How competition for resources make the environmental policy beneficial," Working Papers hal-00423323, HAL.
    7. Nguyen Than Dao & Ottmar Edenhofer, 2014. "On the Fiscal Strategies of Escaping Poverty-Environment Traps (and) Towards Sustainable Growth," CESifo Working Paper Series 4865, CESifo Group Munich.
    8. repec:hal:wpaper:halshs-00555625 is not listed on IDEAS

    More about this item

    Keywords

    Growth; Environment; Overlapping Generations; Human Capital; Health;

    JEL classification:

    • E62 - Macroeconomics and Monetary Economics - - Macroeconomic Policy, Macroeconomic Aspects of Public Finance, and General Outlook - - - Fiscal Policy
    • I21 - Health, Education, and Welfare - - Education - - - Analysis of Education
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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