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How robust is the natalist bias of pollution control?

Authors :
Cafferata, Alessia
Dávila-Fernández, Marwil J.
Source :
Annals of Operations Research; Jun2024, Vol. 337 Issue 3, p1111-1133, 23p
Publication Year :
2024

Abstract

This paper assesses the robustness of the "natalist bias" of pollution control in de la Croix and Gosseries (J Environ Econ Manage 63:271–287, 2012), according to which taxing emissions encourage agents to shift from production to procreation, further deteriorating the environment and gradually impoverishing the next generations. We relax the assumptions that human capital does not depend on environmental quality and that society does not allocate resources to pollution control. Using a similar Overlapping Generations (OLG) growth model, our findings indicate that taxation does not necessarily encourage agents to permanently shift away from production because living under better environmental conditions enhances productivity through human capital formation. As the government increases the emissions price, agents reduce consumption and education spending, hurting output in the short term. However, in the long run, the reduction in emissions that follows taxation more than compensates for the initial adverse effects, provided that the sensitivity of human capital accumulation to environmental degradation is strong enough. Furthermore, as we increase the coefficient capturing such pollution externality, a Neimark–Sacker bifurcation occurs, making the system compatible with persistent endogenous fluctuations. [ABSTRACT FROM AUTHOR]

Details

Language :
English
ISSN :
02545330
Volume :
337
Issue :
3
Database :
Complementary Index
Journal :
Annals of Operations Research
Publication Type :
Academic Journal
Accession number :
177674887
Full Text :
https://doi.org/10.1007/s10479-023-05448-6