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Why can an environmental policy tax promote growth through the channel of education?

  • André Grimaud

    (Economie des Ressources Naturelles, INRA
    Université des Sciences Sociales (Toulouse 1))

  • Frederic Tournemaine

    (UTCC Research Center, University of Chicago)

This paper examines the implications of an environmental policy for growth performances. We develop a model where growth is driven by human capital accumulation. Firms invest in research to develop new technologies to reduce their pollution emissions and education is treated as product which not only enhances the productivity of individuals but also enters in their preferences. We find that a tighter environmental policy can promote growth. The reason is that a higher tax on pollution drives the prices of goods whose production is polluting up. This, in turn, enhances the willingness of individuals to acquire education.

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File URL: http://gateway.isiknowledge.com/gateway/Gateway.cgi?&GWVersion=2&SrcAuth=INRA&SrcApp=INRA&DestLinkType=FullRecord&DestApp=WOS&KeyUT=WOS:000246021800004
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Paper provided by Institut National de la Recherche Agronomique, France in its series Working Papers with number 22635.

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Length: 27-36
Date of creation: 2007
Date of revision:
Publication status: Published in Ecological Economics
Handle: RePEc:inr:wpaper:22635
Contact details of provider: Postal: 4, Allée Adolphe Bobierre, CS 61103, 35011 Rennes Cedex
Web page: http://www.international.inra.fr
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