The Global Environment, Natural Resources, and Economic Growth

The Global Environment, Natural Resources, and Economic Growth

The Global Environment, Natural Resources, and Economic Growth

The Global Environment, Natural Resources, and Economic Growth

Synopsis

Recently, the public attention has turned toward the intricate interrelation between economic growth and global warming. This book focuses on this nexus but broadens the framework to study the issue. Growth is seen as global growth, which affects the global environment and climate change. Global growth, in particular high economic growth rates, imply a fast depletion of renewable and non-renewable resources. Thus this book deals with the impact of the environment and the effect of the exhaustive use of natural resources on economic growth and welfare of market economies as well as the reverse linkage. It is arranged in three parts: Part I of the book discusses the environment and growth. There, Greiner and Semmler incorporate the role of environmental pollution into modern endogenous growth models and use recently developed dynamic methods and techniques to derive appropriate abatement activities that policymakers can institute. Part II looks at global climate change using these same growth models. Here, too, the authors provide direct and transparent policy implications. More specifically, the authors favour tax measures, such as a carbon tax, over emission trading as instruments of mitigation policies. Part III evaluates the use and overuse of renewable and non-renewable resources in the context of a variety of dynamic models. They, in particular, consider the cases when resources interact as an ecological system and analyze issues of ownership of resourcesas well as policy measures to avoid the overuse of resources. In addition, not only intertemporal resource allocation but also the eminent issues relating to intertemporal inequities, as well as policy measures to overcome them, are discussed in each part of the book.

Excerpt

Recently public attention has turned toward the intricate interrelation between economic growth and global warming. This book focuses on this nexus but broadens the framework to study this issue. Growth is seen as global growth, which affects the global environment and climate change. Global growth, in particular high economic growth rates, implies a fast depletion of renewable and nonrenewable resources. Thus the book deals with the impact of economic growth on the environment and the effect of the exhaustive use of natural resources as well as the reverse linkage. We thus address three interconnected issues: economic growth, environment and climate change, and renewable and nonrenewable resources. These three topics and the interrelationship among them need to be treated in a unified framework. In addition, not only intertemporal resource allocation but also the eminent issues relating to intertemporal inequities, as well as policy measures to overcome them, are discussed in the book. Yet more than other literature on global warming and resources, we study those issues in the context of modern growth theory. Besides addressing important issues in those areas we also put forward a dynamic framework that allows focus on the application of solution methods for models with intertemporal behavior of economic agents.

The material in this book has been presented by the authors at several universities and conferences. Chapters have been presented as lectures at Bielefeld University; Max Planck Institute for Demographic Research, Rostock; Sant’Anna School of Advanced Studies of Pisa, Itlay; University of Technology, Vienna; University of Aix-enProvence; Bernard Schwartz Center for Economic Policy Analysis of the New School, New York; and Chuo University, Tokyo, Japan. Some chapters have also been presented at the annual conference of the Society of Computational Economics and the Society of Nonlinear Dynamics and Econometrics. We are grateful for comments by the participants of those workshops and conferences.

Some parts of the book are based on joint work with co-authors. Chapter 14 is based on the joint work of Almuth Scholl and Willi Semmler, and chapter 15 originated in the joint work of Malte Sieveking and Willi Semmler. We particularly want to thank Almuth Scholl and Malte Sieveking for allowing us to use this material here.

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