Climate Change, Industrial Transformation, and "Development Traps"
This paper examines the possibility of environmental "development traps," or "brown poverty traps," caused by interactions between the impacts of climate change and increasing returns in the development of "clean-technology...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2014/06/19736812/climate-change-industrial-transformation-development-traps http://hdl.handle.net/10986/19373 |
| Summary: | This paper examines the possibility of
environmental "development traps," or "brown
poverty traps," caused by interactions between the
impacts of climate change and increasing returns in the
development of "clean-technology" sectors. A
simple specification is used in which the economy can
produce a single homogeneous consumption good with two
different technologies. In the "old" sector,
technology has global diminishing returns to scale and
depends on the use of fossil energy that gives rise to
long-lived, damaging climate change. In the "new"
sector, the technology has convex-concave production and is
not dependent on the polluting energy input. If the new
sector does not grow fast enough to move through the phase
of increasing returns, then the economy may linger at a low
level of income indefinitely or it may achieve greater
progress but then get driven back down to a lower level of
income by environmental degradation. Stimulating growth in
the new sector thus may be a key element for avoiding an
environmental poverty trap and achieving higher, sustained
income levels. |
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