Is the discount rate relevant in explaining the Environmental Kuznets Curve?

Giuseppe Di Vita ()

Journal of Policy Modeling, 2008, vol. 30, issue 2, 191-207

Abstract: In this paper we use Pindyck's model [Pindyck, R. S. (2002). Optimal timing problems in environmental economics. Journal of Economic Dynamics and Control, 26, 1677-1697] to show that the discount rate may play an important role in accounting for the income-pollution pattern observed in the real world. Low levels of income involve high values of discount rate, that are obstacles to the adoption of a pollution abatement policy. Only when the discount rate falls, as a consequence of growth, will it be possible to implement measures for emissions reduction. Thus we are able to derive an inverse U-shaped income-pollution pattern, making use of an argument that has not yet been fully considered in the economic debate on this issue.

Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (9)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0161-8938(07)00132-9
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Is the Discount Rate Relevant in Explaining the Environmental Kuznets Curve? (2003)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:30:y:2008:i:2:p:191-207

Access Statistics for this article

Journal of Policy Modeling is currently edited by A. M. Costa

More articles in Journal of Policy Modeling from Elsevier
Bibliographic data for series maintained by Catherine Liu ().