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- W1990377832 abstract "Economic growth affects the environment negatively. A polluted environment and other environmental constraints reduce economic output and the well-being of consumers. The cost to society of environmental constraints may be called the environmental drag. The traditional economic analysis of growth neglects the environmental drag, while this paper attempts to measure it empirically. We employ a dynamic general equilibrium model of the Norwegian economy, extended to include some important environmental linkages, which feed back to the productivity of labor and capital from damages to health, materials and nature. The environment also directly affects the consumers’ well-being. Using this model, we are able to estimate the environmental drag, measured as reduced welfare from consumption and environmental services. We present macroeconomic effects in terms of reduced production and consumption, and calculate the overall welfare effects. We find that the environmental constraints incorporated in the model probably have a modest effect on production over the next century. The direct welfare loss from a degraded environmental quality, however, is significant. A lower rate of technological growth and a lower discount rate both increase the drag." @default.
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- W1990377832 date "1999-08-01" @default.
- W1990377832 modified "2023-10-18" @default.
- W1990377832 title "Environmental drag: evidence from Norway" @default.
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- W1990377832 doi "https://doi.org/10.1016/s0921-8009(98)00115-3" @default.
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