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The Roles of the Environment and Natural Resources in Economic Growth Analysis


  • Toman, Michael


The primary aim of this paper is pedagogical. We first present and discuss a “wiring diagram” framework in order to elucidate the general links between economic growth and "natural capital." After developing the general framework, we develop parallel frameworks applicable to several specific sectors of the economy (agriculture, forestry, and manufacturing). Two appendices provide a mathematical formulation of the economy-wide framework and a brief historical review of the role of natural resources and the environment in economic growth theory.

Suggested Citation

  • Toman, Michael, 2003. "The Roles of the Environment and Natural Resources in Economic Growth Analysis," Discussion Papers dp-02-71, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-02-71

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    References listed on IDEAS

    1. Heal, Geoffrey M., 1993. "The optimal use of exhaustible resources," Handbook of Natural Resource and Energy Economics,in: A. V. Kneese† & J. L. Sweeney (ed.), Handbook of Natural Resource and Energy Economics, edition 1, volume 3, chapter 18, pages 855-880 Elsevier.
    2. Antonio Estache, 1994. "World Development Report: Infrastructure for Development," ULB Institutional Repository 2013/44144, ULB -- Universite Libre de Bruxelles.
    3. Hartwick, John M, 1977. "Intergenerational Equity and the Investing of Rents from Exhaustible Resources," American Economic Review, American Economic Association, vol. 67(5), pages 972-974, December.
    4. R. M. Solow, 1974. "Intergenerational Equity and Exhaustible Resources," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 29-45.
    5. Nordhaus, William D., 1993. "Rolling the 'DICE': an optimal transition path for controlling greenhouse gases," Resource and Energy Economics, Elsevier, vol. 15(1), pages 27-50, March.
    6. Joseph Stiglitz, 1974. "Growth with Exhaustible Natural Resources: Efficient and Optimal Growth Paths," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 123-137.
    7. Partha Dasgupta & Geoffrey Heal, 1974. "The Optimal Depletion of Exhaustible Resources," Review of Economic Studies, Oxford University Press, vol. 41(5), pages 3-28.
    8. Low, P., 1992. "International Trade and the Environment," World Bank - Discussion Papers 159, World Bank.
    9. Elizabeth J. Z. Robinson & Jeffrey C. Williams & Heidi J. Albers, 2002. "The Influence of Markets and Policy on Spatial Patterns of Non-Timber Forest Product Extraction," Land Economics, University of Wisconsin Press, vol. 78(2), pages 260-271.
    10. L Pez, Ram N, 2000. "Trade reform and environmental externalities in general equilibrium: analysis for an archetype poor tropical country," Environment and Development Economics, Cambridge University Press, vol. 5(04), pages 377-404, October.
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    Cited by:

    1. ERREYGERS, Guido & FEREDE, Tadele, 2009. "The end of subsistence farming: Growth dynamics and investments in human and environmental capital in rural Ethiopia," Working Papers 2009008, University of Antwerp, Faculty of Applied Economics.

    More about this item


    economic growth; natural resources; sustainable development;

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General
    • O1 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development

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