Economic Growth and Resource Use

Abstract

Main Topics: Natural Resource Exploitation; Welfare economics and the environment; Endogenous Progress, Pollution Taxes and Limits to Growth; ustainability concepts and sustainability indicators; Intergenerational equity versus efficiency; Environmental policy: theory and practice; The Dutch-Disease Phenomenon; Trade, Environment & Growth; The Curse of Natural Resources.

Content

1. Natural Resource Exploitation The main propositions of natural resource management are firstly derived in a partial equilibrium framework. The role of natural capital in determining the path of economic development is assessed in a general dynamic equilibrium setting. 2. Welfare economics, pollution, and economic growth This chapter presents a formal analysis of the welfare effects of increasing pollution by extending the traditional “externality argument” from the static to the dynamic setting. 3. Endogenous Growth, Pollution Taxes and Limits to Growth This chapter describes the struggle between pollution externalities, responsible for welfare losses and sub-optimality of decentralized economies, and learning-by-doing externalities that allow to achieve sustained long-run growth when environmental concerns are not taken into account. 4. Sustainability concepts and sustainability indicators This chapter shows how the different notions of “Sustainable Development“ have been formalized in the economic literature. This is crucial in order to give a correct interpretation to the so-called “sustainability indicators“ which, in some cases, lack theoretical foundations. 5. Intergenerational equity and economic efficiency Sustainable development is a matter of intergenerational equity and not that of economic efficiency. Taking this point literally leads to open questions in normative economics, but also raises the question of how to implement intergenerational fairness in market economies. 6. Environmental policy, emission taxes and sustainability Environmental policy and sustainability policy reflect different goals: this chapter contrasts policies aimed at restoring efficiency with policies aimed at preserving intergenerational equity. 7. The Dutch Disease Phenomenon The term “Dutch Disease“ refers to the adverse effects on Dutch manufacturing of the natural gas discoveries of the Sixties through the subsequent appreciation of the Dutch real exchange rate. Economists answered to many historical episodes with “Booming Sector models“ reviewed here. 8. Trade, environment & growth 9. The Curse of Natural Resources The term “Curse of Natural Resources“ refers to the empirical regularities found in international data suggesting that countries with greater natural resource abundance tend to grow less than resource-poor economies. This chapter offers a description and critical review of recent empirical analysis of this topic, as well as possible explanations provided by the theoretical literature.

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