Keywords: CO2 emissions, greenhouse gases, fossil fuels
Chapter 8: Optimal economic growth when CO2 constraints are critical
Past analyses of optimal economic growth behaviour have neglected the constraints of fossil fuel production and the accumulation of atmospheric CO2 having a negative impact on production and productivity, as pursued in the more general context of Chapter 7. The factors of production have been assumed to be either self-regenerating (labour) or augmentable via production (capital) or technical progress. We explore the implications of accounting explicitly for the use of fossil fuel inputs (resources), constrained by a critical CO2 budget.