Growth embedded in a finite Earth: The role of using and producing ideas

William Brock and Anastasios Xepapadeas

No 2564, DEOS Working Papers from Athens University of Economics and Business

Abstract: This paper puts forth a growth model that takes into account the fact that the economy is embedded in a finite Earth. Economic activity uses services which are provided by the biosphere; however, this supply is finite. The question we explore in this paper is whether ideas that drive the accumulation of "brown" and "green" R&D that produces material goods which could be biosphere using or biosphere saving can provide persistent growth when the whole system is embedded in a finite Earth. Or, to put it differently, whether it is possible to have persistent growth supported by idea-driven technical change without violating the impact inequality proposed by Dasgupta (2021), which compares global demand for services provided by the biosphere to the supply of these services. We develop optimal time allocation models and provide conditions that support the feasibility of growth when the net impact on biosphere is zero.

Keywords: growth; limits; biosphere; impact inequality; biosphere saving technology; combination of ideas; spillovers (search for similar items in EconPapers)
JEL-codes: J13 O44 Q01 (search for similar items in EconPapers)
Date: 2025-11-16
New Economics Papers: this item is included in nep-ene, nep-env, nep-lab and nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:aue:wpaper:2564

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