Simulation research on the interaction between environmental protection investment and economic growth in China

Xinchun Li and Quanlong Liu ()
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Xinchun Li: China University of Mining & Technology
Quanlong Liu: China University of Mining & Technology

Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, 2019, vol. 95, issue 1, No 16, 257-269

Abstract: Abstract This paper simulates environmental protection investment (EPI) response strategies by constructing a discrete model of the interaction between EPI and economic growth while constantly improving EPI response strategies according to the simulation results. The oriented elasticity EPI was superior to the perfect elasticity EPI from the perspective of environmental quality. However, oriented elasticity EPI was not always superior to perfect elasticity EPI from the perspective of gross products. Thus, when the proportionality coefficient between the range of investment change and range of environmental quality change is less than or equal to 1.4, the maximum output of oriented elasticity EPI is higher than the maximum output of perfect elasticity EPI. The gap between oriented and perfect elasticity EPI decreases when proportionality coefficient increases. When the value of proportionality coefficient is greater than 1.4, oriented elasticity EPI is not superior to perfect elasticity EPI. Therefore, in view of the above defects, we proposed and simulated a minimal maintenance EPI. The environmental quality improves quickly and does not fluctuate after reaching the maximum value, and the minimum value of environmental quality is also higher than that when the above two EPI response strategies are used. In addition, the increased rate of environmental depreciation will improve environmental quality quickly, but reduce the level of economic development. The growth of environmental protection technology will promote both environmental quality improvements and economic development. Population growth will decrease environmental quality and economic development.

Keywords: Environmental protection investment (EPI); Economic growth; Discrete model; Simulation analysis (search for similar items in EconPapers)
Date: 2019
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DOI: 10.1007/s11069-018-3471-0

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