2002 World Congress of Environmental and Resource Economists

In the paper, we extend the Aghion-Howitt’s [1998–chapter 5] model to allow for semi-endogenous growth and innovations that improve the quality of intermediate goods and reduce the polluting emissions at the same time (defined as the direct effect of innovations over emissions). This allows us to avoid scale effect phenomenon, which is today rejected, and to analyse interactions between Research and Development difficulty and environmental quality.We have found two main results:i)Environmental policies affect long-run growth although other policies do not. We can explain it by the fact that environmental tax grows at steady state with demographic growth.ii)We can underline the fact that optimal growth path exhibits different long-run growth rates which depend on the direct effect of innovations over emissions and on the R&D difficulty. If R&D is “difficult” and the direct effect is “weak”, both GDP and environmental quality decreases.



	Paper Title:	Semi-Endogenous Growth And Environmental Friendly Innovations
	Presenting Author:	Pascal Da Costa (ERASME - EUREQua)
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	Coauthor 2:
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	Abstract:	In the paper, we extend the Aghion-Howitt’s [1998–chapter 5] model to allow for semi-endogenous growth and innovations that improve the quality of intermediate goods and reduce the polluting emissions at the same time (defined as the direct effect of innovations over emissions). This allows us to avoid scale effect phenomenon, which is today rejected, and to analyse interactions between Research and Development difficulty and environmental quality.We have found two main results:i)Environmental policies affect long-run growth although other policies do not. We can explain it by the fact that environmental tax grows at steady state with demographic growth.ii)We can underline the fact that optimal growth path exhibits different long-run growth rates which depend on the direct effect of innovations over emissions and on the R&D difficulty. If R&D is “difficult” and the direct effect is “weak”, both GDP and environmental quality decreases.
	Link to paper:	Not available

	Session / Day / Time	6C / Tuesday / 10:15 - 11:45 am

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