The chapter presents an inquest into potential connection between environmental emission and total factor productivity in growth-theoretic approach. The two-way relationship between economics and environment in worth taking interest and to that end the current chapter attempts to look into how inter-causality impacts the total factor productivity of a closed economy in bearing with the economic growth. The model developed in this work draws on Solow (1956) model with introduction of technological parameter indicating total factor productivity. The model retains the basic construct of Solow model, however, extends it to endogenizing the technological parameter by relating it with environmental emission which in turn is a function of aggregate output. The model in particular assumes a non-monotonic relationship between environmental emission and aggregate output considering the possibility of increased reliance on clean and non-renewable energy leading to an increase in output being associated with decreasing emission (as backed by the use of fuel-efficient technology) beyond a certain point. Besides, the study seeks to overhauls into the implication of environmentally sustainable technology or green technology on the growth-emission dynamics. It obtains that, with technology being endogenous in nature, there arises persistence of disparity among the countries in the drive towards green technology amounts to continuous divergence of their growth rates.

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Environmental Emission, Total Factor Productivity, and Green Technology: A Growth-Theoretic Study

  • Mainak Bhattacharjee,
  • Amrita Chakraborty,
  • Dipti Ghosh

摘要

The chapter presents an inquest into potential connection between environmental emission and total factor productivity in growth-theoretic approach. The two-way relationship between economics and environment in worth taking interest and to that end the current chapter attempts to look into how inter-causality impacts the total factor productivity of a closed economy in bearing with the economic growth. The model developed in this work draws on Solow (1956) model with introduction of technological parameter indicating total factor productivity. The model retains the basic construct of Solow model, however, extends it to endogenizing the technological parameter by relating it with environmental emission which in turn is a function of aggregate output. The model in particular assumes a non-monotonic relationship between environmental emission and aggregate output considering the possibility of increased reliance on clean and non-renewable energy leading to an increase in output being associated with decreasing emission (as backed by the use of fuel-efficient technology) beyond a certain point. Besides, the study seeks to overhauls into the implication of environmentally sustainable technology or green technology on the growth-emission dynamics. It obtains that, with technology being endogenous in nature, there arises persistence of disparity among the countries in the drive towards green technology amounts to continuous divergence of their growth rates.