Is the Discount Rate Relevant in Explaining the Environmental Kuznets Curve?

Giuseppe Di Vita ()

No 2003.83, Working Papers from Fondazione Eni Enrico Mattei

Abstract: In this paper we use Pindyck’s model (2002) to show that the discount rate may play an important role in explaining 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 never yet been introduced in the economic debate on this issue.

Keywords: Discount rate; Environmental Kuznets Curve; Income; Stock pollutants (search for similar items in EconPapers)
JEL-codes: D61 Q2 (search for similar items in EconPapers)
Date: 2003-09
References: View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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Journal Article: Is the discount rate relevant in explaining the Environmental Kuznets Curve? (2008)
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Persistent link: https://EconPapers.repec.org/RePEc:fem:femwpa:2003.83

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