Sustainable economic development and the environment: theory and evidence

Luisito Bertinelli, Eric Strobl () and Benteng Zou

No 2006057, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The relationship between growth and pollution is studied through a vintage capital model, where new technologies are more environmentally friendly. We find that once the optimal scrapping age of technologies is reached, an economy may achieve two possible cases of sustainable development, one in which pollution falls and another in which it stabilizes, or a catastrophic outcome, where environmental quality reaches its lower bound. The outcome will depend on countries' investment path and their propensity to innovate in environmentally clean technologies, both of which are likely to differ across economies. Empirical results using long time series for a number of developed and developing countries indeed confirm heterogenous experiences in the pollution-output relationship.

Keywords: environmental quality; sustainable economic development; vintage capital model; EKC (search for similar items in EconPapers)
JEL-codes: O13 Q01 Q55 (search for similar items in EconPapers)
Date: 2006-06
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Related works:
Journal Article: Sustainable economic development and the environment: Theory and evidence (2012)
Working Paper: Sustainable Economic Development and the Environment: Theory and Evidence (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2006057

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