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Constraints on Dematerialisation and Allocation of Natural Capital along a Sustainable Growth Path

Author

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  • José Manuel Madeira Belbute

    (Department of Economics, University of Évora)

  • João Rodrigues

    (PhD Student, IDMEC, Instituto Superior Técnico)

  • Tiago Domingos

    (IDMEC, Institute of Mechanical Engineering, Instituto Superior Técnico)

  • Pedro Conceição

    (IIN+, Center for Innovation, Technology and Policy Research, Instituto Superior Técnico)

Abstract

This paper extends the neoclassical growth model with natural capital by introducing two new concepts: allocation of natural capital and materialization. We consider that anthropogenic environmental impact is correlated with the throughput of the economy (materialisation). Materialisation is the material throughput per unit of economic activity. We capture the effect of the reduction of this throughput dematerialisation in the elasticities of materialisation and aggregate environmental impact. In our framework the fraction of natural capital devoted to production does not provide direct environmental services nor does it contribute to ecosystem functioning namely affecting the carrying capacity of natural capital.We analyse an optimal sustainable growth path, in the context of exogenous technological change. Our main conclusion is that the ratio of dematerialisation elasticities must equal the inverse of the share of natural capital in order to assure unbounded economic growth with constant natural capital.

Suggested Citation

  • José Manuel Madeira Belbute & João Rodrigues & Tiago Domingos & Pedro Conceição, 2003. "Constraints on Dematerialisation and Allocation of Natural Capital along a Sustainable Growth Path," Economics Working Papers 1_2003, University of Évora, Department of Economics (Portugal).
    • Handle: RePEc:evo:wpecon:1_2003
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    File URL: http://hdl.handle.net/10174/8403
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    Cited by:

    1. Catarina Roseta-Palma & Alexandra Ferreira-Lopes & Tiago Neves Sequeira, 2008. "Towards an Inclusive Model of Sustainable Growth," Working Papers Series 1 ercwp0408, ISCTE-IUL, Business Research Unit (BRU-IUL).
    2. José Manuel Madeira Belbute & Paulo Brito, 2009. "On the Relation Between the Endogenous Growth Rate of the Economy and the Dynamics of Renewable Resources," Economics Working Papers 07_2009, University of Évora, Department of Economics (Portugal).
    3. Lafforgue, Gilles, 2008. "Stochastic technical change, non-renewable resource and optimal sustainable growth," Resource and Energy Economics, Elsevier, vol. 30(4), pages 540-554, December.
    4. Kronenberg, Tobias, 2010. "Dematerialisation of consumption: a win-win strategy?," MPRA Paper 25704, University Library of Munich, Germany.
    5. Ziolkowska, Jadwiga R. & Ziolkowski, Bozydar, 2011. "Product generational dematerialization indicator: A case of crude oil in the global economy," Energy, Elsevier, vol. 36(10), pages 5925-5934.
    6. Roseta-Palma, Catarina & Ferreira-Lopes, Alexandra & Sequeira, Tiago Neves, 2010. "Externalities in an endogenous growth model with social and natural capital," Ecological Economics, Elsevier, vol. 69(3), pages 603-612, January.
    7. Thornley, John H.M. & Shepherd, John J. & France, J., 2007. "An open-ended logistic-based growth function: Analytical solutions and the power-law logistic model," Ecological Modelling, Elsevier, vol. 204(3), pages 531-534.

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    More about this item

    Keywords

    Economic growth; environmental concerns; sustainability constraints; materialisation and allocation of natural capital;
    All these keywords.

    JEL classification:

    • C62 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Existence and Stability Conditions of Equilibrium
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development

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