Endogenous Growth, Green Innovation and GDP Deceleration in a World with Polluting Production Inputs

Kerstin Burghaus and Peter Funk ()

No 84, Working Paper Series in Economics from University of Cologne, Department of Economics

Abstract: We study economic growth and pollution control in a model with endogenous rate and direction of technical change. Economic growth results from growth in the quantity and productivity of polluting intermediates. Pollution can be controlled by reducing the pollution intensity of a given quantity through costly research (green innovation) and by reducing the share of polluting intermediate quantity in GDP. Without clean substitutes, saving on polluting inputs implies that the rate of GDP growth remains below productivity growth (deceleration). While neither green innovation nor deceleration is chosen under laissez-faire, both contribute to long-run optimal pollution control for reasonable parameter values.

Keywords: Endogenous Growth; Direction of Technical Change; Pollution; Green Innovation; Rebound Effect (search for similar items in EconPapers)
JEL-codes: O30 O41 O44 Q55 (search for similar items in EconPapers)
Date: 2016-02-01
New Economics Papers: this item is included in nep-ene, nep-env, nep-gro, nep-ino and nep-knm
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Related works:
Working Paper: Endogenous Growth, Green Innovation and GDP Deceleration in a World with Polluting Production Inputs (2013)
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