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Optimal growth under a climate constraint

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  • Amigues, Jean-Pierre
  • Moreaux, Michel

Abstract

Inside a standard growth model with exhaustible resources, we study the optimal growth policy of an economy submitted to a climate constraint, taking the form of a ceiling over admissible atmospheric carbon concentrations. The optimal scenario is a three phases path: a rise of carbon concentrations until the carbon cap is attained followed by a time phase constrained by the ceiling on possible emissions and a last unconstrained phase of resource depletion. Depending upon the primitives of the model we show that the optimal path may be of two main kinds: paths characterized by a positive growth of the economy and paths corresponding to a complex structural adjustment process involving negative growth during some time interval.

Suggested Citation

  • Amigues, Jean-Pierre & Moreaux, Michel, 2013. "Optimal growth under a climate constraint," TSE Working Papers 13-436, Toulouse School of Economics (TSE).
    • Handle: RePEc:tse:wpaper:27655
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    References listed on IDEAS

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    1. repec:adr:anecst:y:2011:i:103-104:p:07 is not listed on IDEAS
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    9. Ujjayant Chakravorty & Michel Moreaux & Mabel Tidball, 2008. "Ordering the Extraction of Polluting Nonrenewable Resources," American Economic Review, American Economic Association, vol. 98(3), pages 1128-1144, June.
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    Cited by:

    1. Lucas Bretschger & Aimilia Pattakou, 2019. "As Bad as it Gets: How Climate Damage Functions Affect Growth and the Social Cost of Carbon," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 5-26, January.
    2. Aznar-Márquez, J. & Ruiz-Tamarit, J.R., 2017. "Sustainable growth and environmental catastrophes," Mathematical Social Sciences, Elsevier, vol. 89(C), pages 83-91.
    3. Raouf BOUCEKKINE & Blanca MARTINEZ & José Ramon RUIZ-TAMARIT, 2013. "Optimal sustainable policies under pollution ceiling: the demographic side," LIDAM Discussion Papers IRES 2013028, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    4. Supratim Das Gupta, 2015. "Dynamics of Switching from Polluting Resources to Green Technologies," International Journal of Energy Economics and Policy, Econjournals, vol. 5(4), pages 1109-1124.

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    More about this item

    Keywords

    Carbon pollution; economic growth; exhaustible resources;
    All these keywords.

    JEL classification:

    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General
    • Q32 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - Exhaustible Resources and Economic Development
    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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