Environmental income in economic growth of a large open economy for the era of eco-urbanization

Wang, Z., Deng, X., & Liu, G. (2019). Environmental Income in Economic Growth of a Large Open Economy for the era of Eco urbanizati on , Forestr y E conomics Review , Vol. 1 No. 1, pp. 32 56.

25 Pages Posted: 2 Dec 2016 Last revised: 19 Oct 2020

See all articles by Zhan Wang

Zhan Wang

Peking University - National School of Development; Peking University - School of Advanced Agricultural Sciences

Xiangzheng Deng

Chinese Academy of Sciences (CAS) - Institute of Geographic Sciences and Natural Resources Research (IGSNRR)

Gang Liu

University of Southern Denmark - SDU Life Cycle Engineering

Date Written: January 9, 2015

Abstract


Purpose – The purpose of this paper is to show that the environmental income drives economic growth of a large open country.
Design/methodology/approach – The authors detect that the relative environmental income has double effect of “conspicuous consumption” on the international renewable resource stock changes when a new social norm shapes to environmental-friendly behaviors by using normal macroeconomic approaches.
Findings – Every unit of extra demand for renewable resource consumption increases the net premium of domestic capital asset. Even if the technology spillovers are inefficient to the substitution of capital to labor force in a real business cycle, the relative income with scale effect increases drives savings to investment. In this case, the renewable resource consumption promotes both the reproduction to a higher level and saving the potential cost of environmental improvement. Even if without scale effects, the loss of technology inefficient can be compensated by net positive consumption externality for economic growth in a sustainable manner.
Research limitations/implications – It implies how to earn the environment income determines the future pathway of China’s rural conversion to the era of eco-urbanization.
Originality/value – We test the tax incidence to demonstrate an experimental taxation for environmental improvement ultimately burdens on international consumption side.

Keywords: Consumption externalities, Large open economy, Relative income, Renewable resource, Time preference, Eco-urbanization

JEL Classification: E6; F43; H23

Suggested Citation

Wang, Zhan and Deng, Xiangzheng and Liu, Gang, Environmental income in economic growth of a large open economy for the era of eco-urbanization (January 9, 2015). Wang, Z., Deng, X., & Liu, G. (2019). Environmental Income in Economic Growth of a Large Open Economy for the era of Eco urbanizati on , Forestr y E conomics Review , Vol. 1 No. 1, pp. 32 56., Available at SSRN: https://ssrn.com/abstract=2877632 or http://dx.doi.org/10.2139/ssrn.2877632

Zhan Wang (Contact Author)

Peking University - National School of Development ( email )

Beijing, 100871
China

Peking University - School of Advanced Agricultural Sciences ( email )

Beijing, 100871
China

Xiangzheng Deng

Chinese Academy of Sciences (CAS) - Institute of Geographic Sciences and Natural Resources Research (IGSNRR) ( email )

Beijing
China

Gang Liu

University of Southern Denmark - SDU Life Cycle Engineering ( email )

Campusvej 55
Odense M, DK-5230
Denmark

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