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Public Debt, Life Expectancy and the Environment

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  • Nicolas CLOOTENS

Abstract

This paper aims to provide policy recommendations to improve both environmental quality and growth in the context of debt consolidation. For that purpose, we develop an overlapping generation model in which we include public debt, and we modelize the two-way causality between life expectancy and the environment. We use a phase diagram to demonstrate the possibility of an environmental poverty trap. Using comparative statics around steady states, we find that a voluntary environmental policy may allow a country to escape the environmental poverty trap, or may help a country to reach a higher level of development. This paper also argues in favor of debt-for-nature swap mechanisms. Finally, by means of a welfare analysis, we find that public debt is a useful instrument to simultaneously solve the capital over-accumulation problem and reach environmental objectives, but it must be used with caution
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Suggested Citation

  • Nicolas CLOOTENS, 2014. "Public Debt, Life Expectancy and the Environment," LEO Working Papers / DR LEO 2562, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    • Handle: RePEc:leo:wpaper:2562
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    Citations

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    Cited by:

    1. Nicolas CLOOTENS & Francesco MAGRIS, 2021. "The Environmental Unsustainability of Public Debt: Non-Renewable Resources, Public Finances Stabilization and Growth," LEO Working Papers / DR LEO 2871, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    2. Simona-Roxana Ulman & Costica Mihai & Cristina Cautisanu & Ioan-Sebastian Brumă & Oana Coca & Gavril Stefan, 2021. "Environmental Performance in EU Countries from the Perspective of Its Relation to Human and Economic Wellbeing," IJERPH, MDPI, vol. 18(23), pages 1-26, December.
    3. Ke Mao & Pierre Failler, 2022. "Local Government Debt and Green Total Factor Productivity—Empirical Evidence from Chinese Cities," IJERPH, MDPI, vol. 19(19), pages 1-13, September.
    4. Zhiheng Chen & Yuting Ma & Junyi Hua & Yuanhong Wang & Hongpeng Guo, 2021. "Impacts from Economic Development and Environmental Factors on Life Expectancy: A Comparative Study Based on Data from Both Developed and Developing Countries from 2004 to 2016," IJERPH, MDPI, vol. 18(16), pages 1-18, August.
    5. Taner Akan & Halil İbrahim Gündüz & Tara Vanlı & Ahmet Baran Zeren & Ali Haydar Işık & Tamerlan Mashadihasanli, 2023. "Why are some countries cleaner than others? New evidence from macroeconomic governance," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 25(7), pages 6167-6223, July.
    6. Dugan, Anna & Prskawetz, Alexia & Raffin, Natacha, 2022. "The Environment, Life Expectancy and Growth in Overlapping Generations Models: A Survey," ECON WPS - Working Papers in Economic Theory and Policy 01/2022, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    7. Rabeh Khalfaoui & Aviral Kumar Tiwari & Usman Khalid & Muhammad Shahbaz, 2023. "Nexus between carbon dioxide emissions and economic growth in G7 countries: fresh insights via wavelet coherence analysis," Journal of Environmental Planning and Management, Taylor & Francis Journals, vol. 66(1), pages 31-66, January.
    8. Tian Zhao & Zhixin Liu, 2022. "Drivers of CO 2 Emissions: A Debt Perspective," IJERPH, MDPI, vol. 19(3), pages 1-18, February.
    9. Uju Regina Ezenekwe & Kingsley Ikechukwu Okere & Stephen Kelechi Dimnwobi & Chukwunonso Ekesiobi, 2023. "Balancing the Scales: Does Public Debt and Energy Poverty Mitigate or Exacerbate Ecological Distortions in Nigeria?," Working Papers 23/062, European Xtramile Centre of African Studies (EXCAS).
    10. Husam Rjoub & Jamiu Adetola Odugbesan & Tomiwa Sunday Adebayo & Wing-Keung Wong, 2021. "Investigating the Causal Relationships among Carbon Emissions, Economic Growth, and Life Expectancy in Turkey: Evidence from Time and Frequency Domain Causality Techniques," Sustainability, MDPI, vol. 13(5), pages 1-20, March.

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