Examining a Green Growth Model for Policy Implications

Abstract

Utilizing a simple growth model that includes the energy resource

as an essential input, the possibility of a cleaner environment as

well as larger income is demonstrated. Growth rates need not be

lowered to have a cleaner environment, and the energy output ratio

may be reduced. Pollution generated as side effects makes it necessary

for policy makers to come up with suitable policies. In this regard,

several policy options are proposed. Pollution tax (more generally,

an environment tax) and a subsidy for energy and anti-pollution

(environment) related technological progresses are such examples. A

judicious mix of those policies can make income larger, energy usage

smaller, and pollution level lower.