Pollution in a globalized world: Are debt transfers among countries a solution?

Marion Davin, Mouez Fodha and Thomas Seegmuller

International Journal of Economic Theory, 2023, vol. 19, issue 1, 21-38

Abstract: We analyze the effects of a debt relief, that is, a decrease in public debt of a low‐income country financed by a high‐income country, on environmental quality. Under perfect mobility of assets, the debt relief increases the overall capital stock, and environmental quality when public abatements are sufficiently efficient. Welfare in both countries can also improve. Under a weak mobility of assets, capital does no more increase in the richest country, but environmental quality can improve. This comes from a crowding‐out effect of debt in the high‐income country, which does no more take place when the mobility of assets is significant.

Date: 2023
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https://doi.org/10.1111/ijet.12333

Related works:
Working Paper: Pollution in a globalized world: Are debt transfers among countries a solution? (2023)
Working Paper: Pollution in a globalized world: Are debt transfers among countries a solution? (2023)
Working Paper: Pollution in a globalized world: Are debt transfers among countries a solution? (2019)
Working Paper: Pollution in a globalized world: Are debt transfers among countries a solution? (2019)
Working Paper: Pollution in a globalized world: Are debt transfers among countries a solution? (2019)
Working Paper: Pollution in a globalized world: Are debt transfers among countries a solution? (2019)
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