Payments for environmental services and economic growth: A theoretical model
Given the global climate emergency and the complex financing problems facing developing countries, some economists are advocating the introduction of payments for environmental services. The question is whether payments for environmental services will enable developing countries to make the ecologic...
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| Format: | Article |
| Language: | English |
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LLC "CPC "Business Perspectives"
2024-03-01
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| Series: | Environmental Economics |
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| Online Access: | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/19835/EE_2024_01_Moba.pdf |
| _version_ | 1797238117333204992 |
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| author | Dickens Liwono Moba Nicolas Piluso |
| author_facet | Dickens Liwono Moba Nicolas Piluso |
| author_sort | Dickens Liwono Moba |
| collection | DOAJ |
| description | Given the global climate emergency and the complex financing problems facing developing countries, some economists are advocating the introduction of payments for environmental services. The question is whether payments for environmental services will enable developing countries to make the ecological transition compatible with the economic growth they need to develop. This study presents a theoretical analysis of the economic and ecological efficiency of such a mechanism, and aims to determine whether it has any recessionary or disincentive effects. In other words, it determines whether, from a theoretical point of view, the environmental services provided by developing countries are compatible with continued growth. The study introduces a “payments for environmental services” procedure into a general equilibrium model (with involuntary unemployment) composed of multinational firms in developed and developing economies. This theoretical model yields the following results. Firstly, higher ecological taxes can directly increase environmental services without any recessionary effect. The system of payments for environmental services means that green investment is not necessarily incompatible with growth and development in developing countries. On the other hand, services in return for environmental payments can lead to a rebound effect from polluting activities, which is why such programs need to be accompanied by more radical environmental policies. In conclusion, while payments for environmental services can promote both ecological transition and growth in developing countries, it is necessary to control the rebound effect arising from the development of economic activity. |
| first_indexed | 2024-04-24T17:30:32Z |
| format | Article |
| id | doaj.art-79c255fadd7d47fe974c2f795672923f |
| institution | Directory Open Access Journal |
| issn | 1998-6041 1998-605X |
| language | English |
| last_indexed | 2024-04-24T17:30:32Z |
| publishDate | 2024-03-01 |
| publisher | LLC "CPC "Business Perspectives" |
| record_format | Article |
| series | Environmental Economics |
| spelling | doaj.art-79c255fadd7d47fe974c2f795672923f2024-03-28T06:23:14ZengLLC "CPC "Business Perspectives"Environmental Economics1998-60411998-605X2024-03-01151708110.21511/ee.15(1).2024.0619835Payments for environmental services and economic growth: A theoretical modelDickens Liwono Moba0Nicolas Piluso1https://orcid.org/0000-0001-9315-9376Doctoral Student, University of Toulouse Jean Jaures, France; Researcher, CERTOP (Centre d’etude et de recherche Travail Organisation Pouvoir), University of Toulouse Jean Jaures and University of Toulouse Paul Sabatier; Project Manager, University of Kinshasa, CongoAssociate Professor (accredited Research Director), University of Toulouse 3 Paul Sabatier, France; Researcher, CERTOP (Centre d’etude et de recherche Travail Organisation Pouvoir), University of Toulouse Jean Jaures and University of Toulouse Paul Sabatier, FranceGiven the global climate emergency and the complex financing problems facing developing countries, some economists are advocating the introduction of payments for environmental services. The question is whether payments for environmental services will enable developing countries to make the ecological transition compatible with the economic growth they need to develop. This study presents a theoretical analysis of the economic and ecological efficiency of such a mechanism, and aims to determine whether it has any recessionary or disincentive effects. In other words, it determines whether, from a theoretical point of view, the environmental services provided by developing countries are compatible with continued growth. The study introduces a “payments for environmental services” procedure into a general equilibrium model (with involuntary unemployment) composed of multinational firms in developed and developing economies. This theoretical model yields the following results. Firstly, higher ecological taxes can directly increase environmental services without any recessionary effect. The system of payments for environmental services means that green investment is not necessarily incompatible with growth and development in developing countries. On the other hand, services in return for environmental payments can lead to a rebound effect from polluting activities, which is why such programs need to be accompanied by more radical environmental policies. In conclusion, while payments for environmental services can promote both ecological transition and growth in developing countries, it is necessary to control the rebound effect arising from the development of economic activity.https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/19835/EE_2024_01_Moba.pdfcarbon taxdeveloping countriesecological transitiongeneral equilibriumglobal warminggreen sector |
| spellingShingle | Dickens Liwono Moba Nicolas Piluso Payments for environmental services and economic growth: A theoretical model Environmental Economics carbon tax developing countries ecological transition general equilibrium global warming green sector |
| title | Payments for environmental services and economic growth: A theoretical model |
| title_full | Payments for environmental services and economic growth: A theoretical model |
| title_fullStr | Payments for environmental services and economic growth: A theoretical model |
| title_full_unstemmed | Payments for environmental services and economic growth: A theoretical model |
| title_short | Payments for environmental services and economic growth: A theoretical model |
| title_sort | payments for environmental services and economic growth a theoretical model |
| topic | carbon tax developing countries ecological transition general equilibrium global warming green sector |
| url | https://www.businessperspectives.org/images/pdf/applications/publishing/templates/article/assets/19835/EE_2024_01_Moba.pdf |
| work_keys_str_mv | AT dickensliwonomoba paymentsforenvironmentalservicesandeconomicgrowthatheoreticalmodel AT nicolaspiluso paymentsforenvironmentalservicesandeconomicgrowthatheoreticalmodel |