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Does improved environmental policy enhance economic growth?

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  • Knut Rosendahl

Abstract

The environmental impacts on an economy is studied over time using endogenous growth theory. Externalities from the environment on production are central in the analysis, and we examine whether an optimal path realizes more rapid economic growth. The paper focuses mainly on developing countries, where production is largely influenced by the environmental quality. The result of the analysis indicates that the economic growth rate may not depend on the internalization of the environmental externality, but rather on the internalization of the human capital externality. The level of economic activity, however, generally seems to depend on the internalization of both externalities. Copyright Kluwer Academic Publishers 1997

Suggested Citation

  • Knut Rosendahl, 1997. "Does improved environmental policy enhance economic growth?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(3), pages 341-364, April.
    • Handle: RePEc:kap:enreec:v:9:y:1997:i:3:p:341-364
    DOI: 10.1007/BF02441404
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    References listed on IDEAS

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    Cited by:

    1. Anders Rygh Swensen, 1997. "Change in Regime and Markov Models," Discussion Papers 204, Statistics Norway, Research Department.
    2. George Adu, 2013. "Effects on growth of environmental policy in a small open economy," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(4), pages 343-365, October.
    3. Zylicz, Tomasz, 2010. "Goals and Principles of Environmental Policy," International Review of Environmental and Resource Economics, now publishers, vol. 3(4), pages 299-334, May.
    4. Reis, Ana Balcao, 2001. "Endogenous Growth and the Possibility of Eliminating Pollution," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 360-373, November.
    5. Ricci, Francesco, 2007. "Channels of transmission of environmental policy to economic growth: A survey of the theory," Ecological Economics, Elsevier, vol. 60(4), pages 688-699, February.
    6. Dagmar Nelissen & Till Requate, 2007. "Pollution-reducing and resource-saving technological progress," International Journal of Agricultural Resources, Governance and Ecology, Inderscience Enterprises Ltd, vol. 6(1), pages 5-44.
    7. Boly, Mohamed & Combes, Jean-Louis & Menuet, Maxime & Minea, Alexandru & Motel, Pascale Combes & Villieu, Patrick, 2022. "Can public debt mitigate environmental debt? Theory and empirical evidence," Energy Economics, Elsevier, vol. 111(C).
    8. Xepapadeas, Anastasios, 2005. "Economic growth and the environment," Handbook of Environmental Economics, in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 23, pages 1219-1271, Elsevier.
    9. Poul Schou, 2000. "Polluting Non-Renewable Resources and Growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(2), pages 211-227, June.
    10. Ganelli, Giovanni & Tervala, Juha, 2011. "International transmission of environmental policy: A New Keynesian perspective," Ecological Economics, Elsevier, vol. 70(11), pages 2070-2082, September.
    11. Chakraborty, Bidisha & Gupta, Manash Ranjan, 2009. "Human capital, inequality, endogenous growth and educational subsidy: A theoretical analysis," Research in Economics, Elsevier, vol. 63(2), pages 77-90, June.
    12. Alberto Ansuategi & Simone Marsiglio, 2017. "Is Environmental Protection Beneficial for the Environment?," Review of Development Economics, Wiley Blackwell, vol. 21(3), pages 786-802, August.
    13. Vellinga, Nico, 1999. "Multiplicative utility and the influence of environmental care on the short-term economic growth rate," Economic Modelling, Elsevier, vol. 16(3), pages 307-330, August.

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