Skip to main content
Log in

Environmental depletion, defensive consumption and negative externalities

  • Published:
Decisions in Economics and Finance Aims and scope Submit manuscript


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.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Fig. 1
Fig. 2
Fig. 3
Fig. 4
Fig. 5
Fig. 6
Fig. 7
Fig. 8
Fig. 9
Fig. 10
Fig. 11
Fig. 12
Fig. 13

Similar content being viewed by others


  1. This standard procedure (see Romer 1989) is widely used in the literature on positive and negative externalities.

  2. To improve clarity, we omit the analysis of the case for which \(c \alpha -\beta N = 0\), because the resulting dynamics of the system is not robust to uncertainties or perturbations.

  3. In the following, we will refer to the term ’sustainable’ to denote consumption patterns leading to a fixed point in which \(E>0\). Vice versa, we will use the term ’unsustainable’ to denote consumption patterns leading to \(E=0\).

  4. Remember that we measure the quantity of private goods consumed in the economy by the effort that is necessary to produce them, that is, by \((l_1+l_2)N\).


  • 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)

  • Antoci, A.: Environmental degradation as engine of undesirable economic growth via self-protection consumption choices. Ecol Econ 68(5), 1385–1397 (2009)

    Article  Google Scholar 

  • Antoci, A., Bartolini, S.: Negative Externalities as the Engine of Growth in an Evolutionary Context. Working Paper No. 83.99, FEEM, Milan (1999)

  • Antoci, A., Bartolini, S.: Negative externalities and labor input in an evolutionary game. J Environ Dev Econ 9, 1–22 (2004)

    Article  Google Scholar 

  • Antoci, A., Borghesi, S.: Preserving or escaping? On the welfare effects of environmental self-protective choices. J Socio-Econ 41(2), 248–254 (2012)

    Article  Google Scholar 

  • 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)

    Article  Google Scholar 

  • 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)

    Article  Google Scholar 

  • Antoci, A., Borghesi, S., Russu, P.: Environmental protection mechanisms and technological dynamics. Econ Model 29(3), 840–847 (2012)

    Article  Google Scholar 

  • 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)

    Article  Google Scholar 

  • Antoci, A., Borghesi, S., Sodini, M.: Water resource use and competition in an evolutionary model. Water Resour Manag 31(8), 2523–2543 (2017)

    Article  Google Scholar 

  • 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)

    Article  Google Scholar 

  • Bartolini, S., Bonatti, L.: Environmental and social degradation as the engine of economic growth. Ecol Econ 43(1), 1–16 (2002)

    Article  Google Scholar 

  • Bird, P.J.: The transferability and depletability of externalities. J Environ Econ Manag 14(1), 54–57 (1987)

    Article  Google Scholar 

  • Borghesi, S.: Water tradable permits: a review of theoretical and case studies. J Environ Plan Manag 57(9), 1305–1332 (2014)

    Article  Google Scholar 

  • Borghesi, S., Giovannetti, G., Iannucci, G., Russu, P.: The dynamics of foreign direct investments in land and pollution accumulation. Environ. Resour. Econ. (2018).

    Article  Google Scholar 

  • 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)

  • Costanza, R., et al.: Time to leave GDP behind. Nature 505, 283–285 (2014)

    Article  Google Scholar 

  • 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)

    Article  Google Scholar 

  • 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)

    Article  Google Scholar 

  • Di Vita, G.: Legal families and environmental protection: is there a causal relationship? J. Policy Model. 31, 694–707 (2009)

    Article  Google Scholar 

  • Hirsch, F.: Social Limits to Growth. Harvard University Press, Cambridge (1976)

    Book  Google Scholar 

  • Hueting, R.: New Scarcity and Economic Growth. More Welfare Through Less Production?. North Holland, Amsterdam (1980)

    Google Scholar 

  • Kubiszewski, I., et al.: Beyond GDP: measuring and achieving global genuine progress. Ecol. Econ. 93, 57–68 (2013)

    Article  Google Scholar 

  • Leipert, C.: National income and economic growth: the conceptual side of defensive expenditures. J. Econ. Issues 23(3), 843–56 (1989)

    Article  Google Scholar 

  • Magnan, A.K., et al.: Addressing the risk of maladaptation to climate change. Wiley Interdiscip. Rev. Clim. Change 7(5), 646–665 (2016)

    Article  Google Scholar 

  • Mangasarian, O.L.: Sufficient conditions for the optimal control of nonlinear systems. SIAM J. Control 4(1), 139–152 (1966)

    Article  Google Scholar 

  • Marini, G., Scaramozzino, P.: Overlapping generations and environmental control. J. Environ. Econ. Manag. 29, 64–77 (1995)

    Article  Google Scholar 

  • 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)

    Article  Google Scholar 

  • Perrings, C., Halkos, G.: Who cares about biodiversity? Optimal conservation and transboundary biodiversity externalities. Environ. Resour. Econ. 52(4), 585–608 (2012)

    Article  Google Scholar 

  • 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 

  • Shogren, J.F., Crocker, T.D.: Cooperative and noncoperative protection against transferable and filterable externalities. Environ. Resour. Econ. 1, 195–214 (1991)

    Article  Google Scholar 

  • Sun, C., Kahn, M.E., Zheng, S.: Self-protection investment exacerbates air pollution exposure inequality in urban China. Ecol. Econ. 131, 468–474 (2017)

    Article  Google Scholar 

  • United Nations: Transforming our world: The 2030 agenda for sustainable development. Resolution adopted by the General Assembly, 25 September 2015 (2015)

Download references

Author information

Authors and Affiliations


Corresponding author

Correspondence to Alessandro Fiori Maccioni.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

The author expresses his sincere thanks to Prof. Davide Radi and the two anonymous referees for their precious comments, which contributed to increase the quality of this work.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Fiori Maccioni, A. Environmental depletion, defensive consumption and negative externalities. Decisions Econ Finan 41, 203–218 (2018).

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI:


JEL Classification