Advertisement

Decisions in Economics and Finance

, Volume 41, Issue 2, pp 203–218 | Cite as

Environmental depletion, defensive consumption and negative externalities

  • Alessandro Fiori MaccioniEmail author
Article
  • 51 Downloads

Abstract

This paper analyses economic dynamics in a context in which the production and consumption choices of economic agents generate environmental degradation. Agents can defend themselves from environmental degradation by increasing the production and consumption of output, which is assumed to be a (perfect) substitute for environmental quality. We consider the cases in which agents can coordinate their actions or not, and we show that if the dynamics is conditioned by negative externalities (so that there is no coordination), then a self-reinforcing mechanism may occur leading to production and consumption levels higher than the socially optimal ones. A complete analysis of the dynamics and of the welfare properties of the stationary states is provided.

Keywords

Defensive consumption Negative externalities Environmental goods Self-protection Altruism 

JEL Classification

Q56 Q01 

Notes

References

  1. Antoci, A.: Negative Externalities and Growth of the Activity Level. Working Paper No. 9308, National Research Group MURST on Nonlinear Dynamics and Applications to Economic and Social Sciences, University of Florence, Italy (1996)Google Scholar
  2. Antoci, A.: Environmental degradation as engine of undesirable economic growth via self-protection consumption choices. Ecol Econ 68(5), 1385–1397 (2009)CrossRefGoogle Scholar
  3. Antoci, A., Bartolini, S.: Negative Externalities as the Engine of Growth in an Evolutionary Context. Working Paper No. 83.99, FEEM, Milan (1999)Google Scholar
  4. Antoci, A., Bartolini, S.: Negative externalities and labor input in an evolutionary game. J Environ Dev Econ 9, 1–22 (2004)CrossRefGoogle Scholar
  5. Antoci, A., Borghesi, S.: Preserving or escaping? On the welfare effects of environmental self-protective choices. J Socio-Econ 41(2), 248–254 (2012)CrossRefGoogle Scholar
  6. Antoci, A., Borghesi, S.: Environmental degradation, self-protection choices and coordination failures in a North–South evolutionary model. J Econ Interact Coord 5(1), 89–107 (2010)CrossRefGoogle Scholar
  7. Antoci, A., Borghesi, S., Galeotti, M.: Should we replace the environment? Limits of economic growth in the presence of self-protective choices. Int J Soc Econ 35(4), 283–297 (2008)CrossRefGoogle Scholar
  8. Antoci, A., Borghesi, S., Russu, P.: Environmental protection mechanisms and technological dynamics. Econ Model 29(3), 840–847 (2012)CrossRefGoogle Scholar
  9. Antoci, A., Borghesi, S., Russu, P., Ticci, E.: Foreign direct investments, environmental externalities and capital segmentation in a rural economy. Ecol Econ 116, 341–353 (2015)CrossRefGoogle Scholar
  10. Antoci, A., Borghesi, S., Sodini, M.: Water resource use and competition in an evolutionary model. Water Resour Manag 31(8), 2523–2543 (2017)CrossRefGoogle Scholar
  11. Antoci, A., Russu, P., Sordi, S., Ticci, E.: Industrialization and environmental externalities in a Solow-type model. J Econ Dyn Control 47, 211–224 (2014)CrossRefGoogle Scholar
  12. Bartolini, S., Bonatti, L.: Environmental and social degradation as the engine of economic growth. Ecol Econ 43(1), 1–16 (2002)CrossRefGoogle Scholar
  13. Bird, P.J.: The transferability and depletability of externalities. J Environ Econ Manag 14(1), 54–57 (1987)CrossRefGoogle Scholar
  14. Borghesi, S.: Water tradable permits: a review of theoretical and case studies. J Environ Plan Manag 57(9), 1305–1332 (2014)CrossRefGoogle Scholar
  15. Borghesi, S., Giovannetti, G., Iannucci, G., Russu, P.: The dynamics of foreign direct investments in land and pollution accumulation. Environ. Resour. Econ. (2018).  https://doi.org/10.1007/s10640-018-0263-7
  16. Bürki, R., Abegg, B., Elsasser, H.: Climate change and tourism in the alpine regions of Switzerland. In: Amelung, B., et al. (eds.) Climate change and tourism: assessment and coping strategies. Maastricht, pp. 165–172 (2007)Google Scholar
  17. Costanza, R., et al.: Time to leave GDP behind. Nature 505, 283–285 (2014)CrossRefGoogle Scholar
  18. Davis, L.W., Gertler, P.J.: Contribution of air conditioning adoption to future energy use under global warming. Proc. Natl. Acad. Sci. 112(19), 5962–5967 (2015)CrossRefGoogle Scholar
  19. Dile, Y.T., Karlberg, L., Temesgen, M., Rockström, J.: The role of water harvesting to achieve sustainable agricultural intensification and resilience against water related shocks in sub-Saharan Africa. Agric. Ecosyst. Environ. 181, 69–79 (2013)CrossRefGoogle Scholar
  20. Di Vita, G.: Legal families and environmental protection: is there a causal relationship? J. Policy Model. 31, 694–707 (2009)CrossRefGoogle Scholar
  21. Hirsch, F.: Social Limits to Growth. Harvard University Press, Cambridge (1976)CrossRefGoogle Scholar
  22. Hueting, R.: New Scarcity and Economic Growth. More Welfare Through Less Production?. North Holland, Amsterdam (1980)Google Scholar
  23. Kubiszewski, I., et al.: Beyond GDP: measuring and achieving global genuine progress. Ecol. Econ. 93, 57–68 (2013)CrossRefGoogle Scholar
  24. Leipert, C.: National income and economic growth: the conceptual side of defensive expenditures. J. Econ. Issues 23(3), 843–56 (1989)CrossRefGoogle Scholar
  25. Magnan, A.K., et al.: Addressing the risk of maladaptation to climate change. Wiley Interdiscip. Rev. Clim. Change 7(5), 646–665 (2016)CrossRefGoogle Scholar
  26. Mangasarian, O.L.: Sufficient conditions for the optimal control of nonlinear systems. SIAM J. Control 4(1), 139–152 (1966)CrossRefGoogle Scholar
  27. Marini, G., Scaramozzino, P.: Overlapping generations and environmental control. J. Environ. Econ. Manag. 29, 64–77 (1995)CrossRefGoogle Scholar
  28. Martinet, V., Blanchard, F.: Fishery externalities and biodiversity: trade-offs between the viability of shrimp trawling and the conservation of Frigatebirds in French Guiana. Ecol. Econ. 68(12), 2960–2968 (2009)CrossRefGoogle Scholar
  29. Perrings, C., Halkos, G.: Who cares about biodiversity? Optimal conservation and transboundary biodiversity externalities. Environ. Resour. Econ. 52(4), 585–608 (2012)CrossRefGoogle Scholar
  30. Romer, P.M.: Capital accumulation in the theory of long-run growth. In: Barro, R.J. (ed.) Modern Business Cycle Theory. Basil Blackwell, Oxford (1989)Google Scholar
  31. Shogren, J.F., Crocker, T.D.: Cooperative and noncoperative protection against transferable and filterable externalities. Environ. Resour. Econ. 1, 195–214 (1991)CrossRefGoogle Scholar
  32. Sun, C., Kahn, M.E., Zheng, S.: Self-protection investment exacerbates air pollution exposure inequality in urban China. Ecol. Econ. 131, 468–474 (2017)CrossRefGoogle Scholar
  33. United Nations: Transforming our world: The 2030 agenda for sustainable development. Resolution adopted by the General Assembly, 25 September 2015 (2015)Google Scholar

Copyright information

© Associazione per la Matematica Applicata alle Scienze Economiche e Sociali (AMASES) 2018

Authors and Affiliations

  1. 1.Department of EconomicsUniversity of SassariSassariItaly

Personalised recommendations