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