Inderscience Publishers

Notes on environmental regulation and growth

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This paper looks at the costs of regulating the environment on economic growth in a model that has increasing returns to scale in production at lower levels of development. It concludes that these costs are low, as are the costs of moving from a non-optimal regulatory policy to an optimal one. The implied shape of the Environmental Kuznets Curve may have one or two humps, but this depends upon the underlying parameters.

Keywords: economic growth, environmental Kuznets curve, environmental policy, greenhouse gases, GHG emissions, increasing returns to scale, Kyoto protocol, environmental regulation

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