Environmental pollution in a growing economy with endogenous structural change

Arbeitspapier

In this paper we study the impact of environmental pollution in an endogenous growth model that allows for structural change. The model is based on doubly-differentiated R&D where newer, less polluting technologies gradually replace older ones. The analysis shows that the presence of environmental externalities stimulates structural change but reduces the growth rate of the economy. Further, comparing the models with and without structural change demonstrates that the latter implies stronger environmental damages and, consequently, a lower growth rate than the first one. Finally, levying a tax on the polluting output speeds up structural change, thus, reducing environmental pollution and spurring economic growth. This can give new support for the double dividend hypothesis.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WWZ Working Paper ; No. 2017/03

Classification and Topics

• Classification: Wirtschaft ; Environmental Economics: Technological Innovation ; Innovation and Invention: Processes and Incentives ; Environment and Growth
• Subject: Environmental Damages ; Endogenous Growth ; Creative Destruction ; Endogenous Structural Change ; Double Dividend Hypothesis

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Bondarev, Anton ; Greiner, Alfred
• Event: Veröffentlichung
• (who): University of Basel, Center of Business and Economics (WWZ)
• (where): Basel
• (when): 2017

Further information

• DOI: doi:10.5451/unibas-ep61314
• Handle: http://hdl.handle.net/10419/162181
• Last update: 10.03.2025, 11:43 AM CET