Why can an environmental policy tax promote growth through the channel of education?

André Grimaud and Frederic Tournemaine
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André Grimaud: LERNA - Economie des Ressources Naturelles - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - INRA - Institut National de la Recherche Agronomique - CEA - Commissariat à l'énergie atomique et aux énergies alternatives, UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse

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Abstract: This paper examines the implications of an environmental policy for growth performances. We develop a model where growth is driven by human capital accumulation. Firms invest in research to develop new technologies to reduce their pollution emissions and education is treated as product which not only enhances the productivity of individuals but also enters in their preferences. We find that a tighter environmental policy can promote growth. The reason is that a higher tax on pollution drives the prices of goods whose production is polluting up. This, in turn, enhances the willingness of individuals to acquire education.

Keywords: EDUCATION; KNOWLEDGE; ECONOMIC GROWTH; ENDOGENOUS GROWTH; INNOVATION; MARKET; ENVIRONMENT; TECHNOLOGICAL CHANGE; MODEL; CONSUMPTION (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (42)

Published in Ecological Economics, 2007, 62 (1), pp.27-36. ⟨10.1016/j.ecolecon.2006.11.006⟩

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Journal Article: Why can an environmental policy tax promote growth through the channel of education? (2007)
Working Paper: Why can an environmental policy tax promote growth through the channel of education? (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-02657845

DOI: 10.1016/j.ecolecon.2006.11.006

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