Journal
ENVIRONMENTAL & RESOURCE ECONOMICS
Volume 41, Issue 4, Pages 439-463Publisher
SPRINGER
DOI: 10.1007/s10640-008-9201-4
Keywords
Polluting non-renewable resources; Growth; Environmental policy; Bias of technical change; O32; O41; Q20; Q32
Categories
Ask authors/readers for more resources
We study the effects of an economic policy in an endogenous growth general equilibrium framework where production of consumption goods requires two resource inputs: a polluting non-renewable resource and a non-polluting labour resource. The use of the former contributes to the accumulation of pollution in the atmosphere, which affects welfare. There is a specific research sector associated with each of those resources. We provide a full welfare analysis, and we describe the equilibrium paths in a decentralized economy. We go on to study the effects of three associated economic policy tools: a tax on the polluting resource, and two research subsidies. We show that the optimal environmental policy has two main effects; it delays the extraction of the resource and with it the level of polluting emissions and it reallocates research efforts, decreasing the amount put into grey research to the benefit of green research. We also show that the environmental policy is grey-biased in the short-term, and green-biased in the long-term. Finally, we compute the optimal values for these tools.
Authors
I am an author on this paper
Click your name to claim this paper and add it to your profile.
Reviews
Recommended
No Data Available