Clean versus Dirty Economic Growth

Palokangas T (2012). Clean versus Dirty Economic Growth. Discussion Paper No. 649, HECER - Helsinki Center of Economic Research, University of Helsinki, Finland (6 June 2012)

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Abstract

This document considers an economy with many regions and two engines of growth: horizontal R&D, which increases the number of polluting product lines; and vertical R&D, which improves productivity in these lines. Pollution in any region decreases welfare in all regions. Any group of regions can form a jurisdiction where a common policy maker controls pollution. Large jurisdictions, which can better internalize externality through pollution, perform vertical R&D. Because jurisdictions face decreasing unit costs of administration, they expand, performing first horizontal and then vertical R&D. This generates an environmental Kuznets curve (EKC) on which pollution first aggravates and then alleviates.

Item Type: Other
Uncontrolled Keywords: Pollutants; Growth and environment; Endogenous public policy; Economic integration; Environmental Kuznets curve
Research Programs: Advanced Systems Analysis (ASA)
Bibliographic Reference: Discussion Paper No. 649, HECER - Helsinki Center of Economic Research, University of Helsinki, Finland (6 June 2012)
Depositing User: IIASA Import
Date Deposited: 15 Jan 2016 08:47
Last Modified: 20 Jan 2016 16:47
URI: http://pure.iiasa.ac.at/10117

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