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A simple degrowth model

Author

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  • Marc Germain

    (LEM-CNRS (UMR 9221), Université de Lille 3)

Abstract

With the help of a growth model à la Ramsey with a natural resource and pollution and relying on the postulates of ecological economics, this paper studies the impact of voluntary degrowth policies on production and welfare. The instrument of these policies is a tax levied on the natural resource. These policies are assumed to be applied by the public authorities after the downturn of the households'utility function due to the increase of pollution. With respect to the laissez-faire situation, their impact is to simultaneously decrease production and pollution on the one hand and increase welfare on the other. A delayed reaction of the public authorities after the turnover of the households'utility function implies a higher tax rate on the resource during the first periods. If the authorities'preference for the future is higher, then welfare gains from the degrowth policy are lower for the first generations of the dynasty and higher for the later. The impact of technical progress saving the resource or improving the pollution treatment is also analysed.

Suggested Citation

  • Marc Germain, 2016. "A simple degrowth model," Working Papers 2016.21, FAERE - French Association of Environmental and Resource Economists.
    • Handle: RePEc:fae:wpaper:2016.21
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    References listed on IDEAS

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    More about this item

    Keywords

    degrowth; ecological econonomic; steady state economics; pollution tax;
    All these keywords.

    JEL classification:

    • O44 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Environment and Growth
    • O49 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

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