Economic Growth and Environmental Resources Allocation
By William Jaeger and Van KolpinABSTRACT
- an initial endowment of an abundant, passively available amenity such as ambient air or water quality, ecosystem functions and habitat, or atmospheric conditions and
- the latent potential to provide competing goods such as extractive resources or waste disposal services.
Our analyses indicate that even in the absence of a social planner or other institutional mechanism to deter free riding, the allocation of environmental resources may follow a U-shaped path. These results are applicable to both environmental pollution and resource extraction. These theoretical results are consistent with recent empirical evidence that environmental degradation may rise, and then fall, with rising per capita income, evidence which has rekindled the long-lived debate about the relationship between economic growth and environmental degradation.
A range of implications of our result are explored including how trade, international transfers, income distribution, population growth, and irreversibility affect the environmental path.
KEYWORDS: economic growth, environmental resources, environmental Kuznets curve
View Trade, Growth, Natural Resources, and the Environment Session
