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A central organizing principle in economics is that per period the value of product or output "factors back" and thus equals the value of inputs. Presumably this idea got firmly rooted with Walras's Elements, of 1874. Here we draw on Hamilton's formulation of classical mechanics to tease out the same sort of account, in units of energy rather than dollars, for the motion of "a particle" in classical mechanics (CM). At each instant of time, the energy value of output (a vector comprising position-change for a particle and velocity or momentum-change) is balanced with the energy value of input flow from capital, also a vector with two components. Sustainable or periodic activity has the capital goods restored by investment to their initial values over the period in question. The Virial Theorem in CM is an energy account which reflects this restoration of position variables over the period and we indicate that there is a corresponding restoration account in units of energy for the momentum variable over the period. Planetary motion (Kepler's model developed by Newton) is of course one striking instance of periodic activity in CM. Motion of the undamped pendulum is another well-known case. [ABSTRACT FROM AUTHOR]

We study the conditions for the emergence of cooperation in a spatial common-pool resource (CPR) game.We consider three types of agents: cooperators, defectors and enforcers. The role of enforcers is to punish defectors for overharvesting the resource. Agents are located on a circle and they only observe the actions of their two nearest neighbors. Their payoffs are determined by both local and global interactions and they modify their actions by imitating the strategy in their neighborhood with the highest payoffs on average. Using theoretical and numerical analysis, we find a large diversity of equilibria to be the outcome of the game. In particular, we find conditions for the occurrence of equilibria in which the three strategies coexist.We also derive the stability of these equilibria. Finally, we show that introducing resource dynamics in the system favors the occurrence of cooperative equilibria. Key words: common property, cooperation, evolutionary game theory, local and global interaction game, self-organization [ABSTRACT FROM AUTHOR]

This paper empirically investigates the development of cross-country differences in energy- and labour productivity. The analysis is performed at a detailed sectoral level for 14 OECD countries, covering the period 1970-1997. A σ-convergence analysis reveals that the development over time of the cross-country variation in productivity performance differs across sectors as well as across different levels of aggregation. Both patterns of convergence as well as divergence are found. Cross-country variation of productivity levels is typically larger for energy than for labour. A β- convergence analysis provides support for the hypothesis that in most sectors lagging countries tend to catch up with technological leaders, in particular in terms of energy productivity. Moreover, the results show that convergence is conditional, meaning that productivity levels converge to country-specific steady states. Energy prices and wages are shown to positively affect energy- and labour-productivity growth, respectively. We also find evidence of economies of scale, whereas the investment share, openness and specialization play only a modest role in explaining cross-country variation in energy- and labour-productivity growth. Key words: convergence, energy productivity, labour productivity, sectoral analysis [ABSTRACT FROM AUTHOR]

Key words: Endogenous growth, innovation, non-renewable resources, knife-edge conditions, robustness, limits to growth. The aim of this article is to review issues related to the incorporation of scarce natural resources in the theory of economic growth and development. More specifically, we shall concentrate on the role of non-renewable resources. A nonrenewable resource is a natural resource the amount of which on earth is finite and which has no natural regeneration process (at least not within a relevant time scale). Hence, the stock of a non-renewable resource is depletable. Fossil fuels as well as many non-energy minerals are examples. A renewable resource is also available only in limited supply, but its stock is replenished by a natural regeneration process. Hence, if the stock of a renewable resource is not over-exploited, it can be sustained in a more or less constant amount. Fertile soil, fish in the sea, and environmental qualities (clean air etc.) would be examples. In this article the focus is on the specific features of non-renewable resources in relation to the feasibility of sustained economic growth. [ABSTRACT FROM AUTHOR]

This paper analyzes efficient pollution taxation within a stochastic model of endogenous growth. Pollution is a by-product of production and causes disutility. Furthermore, the productivity which results from environmental quality is uncertain. This reflects e.g. uncertain capital depreciation induced by natural disasters like hurricanes or floods. This uncertainty is shown to raise an ambiguous impact on the optimal pollution level as well as on optimal environmental taxation. Market equilibrium turns out to be suboptimal, since the households mis-perceive their individual impact on pollution. Conditions for welfare maximizing pollution taxation are stated and it is shown that a direct pollution tax is not appropriate to yield Pareto-optimal growth. Instead, a linear capital income tax together with a linear abatement subsidy build an efficient tax scheme, if secondarily the governmental budget is balanced. Moreover, an increase in the riskiness of environmental productivity may even lead to an increase in the optimal pollution level and to a decrease in optimal environmental taxation, depending predominantly on the preference parameters. Key words: pollution, taxation, uncertainty, endogenous growth [ABSTRACT FROM AUTHOR]

We employ a general purpose technology model with endogenous stochastic growth to simulate the effects of different energy policy schemes. A Research and Development (R&D) sector produces endogenous growth by developing radical and incremental technologies. These innovations result in blueprints for intermediate goods, which require raw capital and either carbon-based or noncarbon- based fuels. A carbon tax therefore affects not only the final production sector but also the R&D sector by making the development of non-carbon-based technologies more attractive. Due to path dependencies and possible lock-in situations, economic policy can have a significant long-term impact on the energy structure of the economy. We examine the effects of different carbon policies on growth and environmental quality.We find that an anti-carbon policy may reduce growth initially, but in the long run there is a strong potential for a "double dividend" due to faster growth and reduced pollution. Key words: general purpose technology, carbon tax, R&D, growth, carbon fuel consumption [ABSTRACT FROM AUTHOR]

I develop a simple new growth model to demonstrate a mechanism through which environmental regulations can boost the growth rate of production towards its socially optimal level, a version of the Porter hypothesis. The mechanism is also likely to operate in much more complex economies, although the net effect of regulations will be uncertain in such economies. In the model, growth is driven by researchers striving for monopoly profits. New technologies must compete with the old for market share. They are not only more productive than the old, but also more environmentally friendly. Introduction of technology standards favours new technologies and therefore increases expected returns to research, hence the quantity of research - and the growth rate - in the economy goes up. This may be a social benefit if knowledge, which drives growth, is underprovided due to spillovers. Key words: endogenous growth, innovation, environment, Schumpeter, Porter hypothesis. [ABSTRACT FROM AUTHOR]

We study the optimal timing of adoption of a cleaner technology and its effects on the rate of growth of an economy in the context of an AK endogenous growth model. We show that the results depend upon the behavior of the marginal utility of environmental quality with respect to consumption. When it is increasing, we derive the capital level at the optimal timing of adoption.We show that this capital threshold is independent of the initial conditions on the stock of capital, implying that capital-poor countries tend to take longer to adopt. Also, country-specific characteristics, as the existence of high barriers to adoption, may lead to different capital thresholds for different countries. If the marginal utility of environmental quality decreases with consumption, a country should never delay adoption; the optimal policy is either to adopt immediately or, if adoption costs are "too high", to never adopt. The policy implications of these results are discussed in the context of the international debate surrounding the environmental political agenda. [ABSTRACT FROM AUTHOR]

We set up a simple dynamic macroeconomic model with (i) polluting consumption and a preference for a clean environment, (ii) increasing returns in abatement giving rise to an EKC and (iii) sustained growth resulting from a linear final-output technology. There are two sorts of market failures caused by external effects associated with consumption and environmental effort. The model is employed to investigate the determinants of the turning point and the cost effectiveness of different public policies aimed at a reduction of the environmental burden. Moreover, the model offers a potential explanation of an N-shaped pollution-income relation. It is shown that the model is compatible with most empirical regularities on economic growth and the environment. [ABSTRACT FROM AUTHOR]

There are many compelling reasons why environmental and resource problems should be placed in a dynamic perspective. Traditionally, resource economics needs to study the dynamics of depletion of natural resources and environmental services. Current use of non-renewables, such as oil reserves, determines future resource availability. Renewable natural resources regenerate in a dynamic ecological process, which is disturbed by commercial harvesting activities. Similarly, environmental economics has to deal with pollution dynamics when pollution entails long-lasting cumulative effects in soil and marine resources or in the atmosphere. Looking at the impact of resource scarcity and pollution for the economy as a whole we additionally find that macroeconomic dynamics become highly relevant. To offset the increasing scarcity of natural resources and to promote sustainable development, capital accumulation and technological change are essential. In particular, the development and adoption of new technologies allow improving resource and abatement efficiency. Finally, social dynamics are important: the behaviour of polluters or natural resource users, as well as policymakers, changes over time because of learning behaviour, or because of changing perceptions, the building-up of new information, and the reaction thereupon. [ABSTRACT FROM AUTHOR]