Croissance endogène et pollution: une approche fondée sur le comportement du consommateur

Sylviane Gastaldo and Lionel Ragot ()

Annals of Economics and Statistics, 2000, issue 57, 25-48

Abstract: This paper develops a continuous time model of endogenous growth based on innovations in consumption goods. The model considers two types of goods, standard goods (whose production and consumption lead to pollution), and green goods (which have no effect on the environment). In addition to consumers' taste for diversity, a parameter indicating consumers' preference for green goods is introduced. The paper examines how this preference parameter affects competitive equilibria. It then describes the dynamics of the model when the preference parameter is endogenous and proportional to an environmental quality indicator. We examine how this parameter influences the attainment of competitive equilibria. If consumers' preference for green goods is sufficiently high, research (i.e., innovation) will occur only in the green-goods sector, but standard goods will continue to be produced and sold. If preference for green goods is low, the opposite will occur, with extant green goods continuing to be produced and sold, but new products will be introduced only in the standard-goods sector. Finally, if preference for green goods is intermediate, innovation will occur in both sectors. We then describe the dynamics of the model when consumers' preference for green goods is endogenous, and assumed to be an increasing function of environmental degradation. The key parameter will then be the value of consumers' environmental concern, that is, the influence of the state of the environment on the consumer preference parameter. The dynamic evolution to the long-run situation is examined in detail. If environmental concern is high, long run growth will be characterized by innovation in the green-goods sector alone. For a lower environmental-concern value long-run growth will see innovation in both sectors.

Date: 2000
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