Toman, MichaelGolub, Alexander2014-08-152014-08-152014-06https://hdl.handle.net/10986/19373This paper examines the possibility of environmental "development traps," or "brown poverty traps," caused by interactions between the impacts of climate change and increasing returns in the development of "clean-technology" sectors. A simple specification is used in which the economy can produce a single homogeneous consumption good with two different technologies. In the "old" sector, technology has global diminishing returns to scale and depends on the use of fossil energy that gives rise to long-lived, damaging climate change. In the "new" sector, the technology has convex-concave production and is not dependent on the polluting energy input. If the new sector does not grow fast enough to move through the phase of increasing returns, then the economy may linger at a low level of income indefinitely or it may achieve greater progress but then get driven back down to a lower level of income by environmental degradation. Stimulating growth in the new sector thus may be a key element for avoiding an environmental poverty trap and achieving higher, sustained income levels.en-USCC BY 3.0 IGOACCUMULATION OF CARBONADVERSE IMPACTSAPPROPRIATE TECHNOLOGYATMOSPHERECAPITA INCOMECAPITAL ACCUMULATIONCAPITAL GOODSCAPITAL INPUTCAPITAL INVESTMENTCAPITAL STOCKCAPITAL STOCKSCARBONCARBON DIOXIDECARBON DIOXIDE EMISSIONSCARBON INTENSITYCLIMATECLIMATE CHANGECLIMATE DAMAGESCOCO2CONSTANT RATECONSTANT RETURNSCONSTANT RETURNS TO SCALECONSUMPTION INCREASESCONVERGENCEDAMAGESDEBTDEVELOPMENT ECONOMICSDEVELOPMENT POLICYDIMINISHING RETURNSDIMINISHING RETURNS TO SCALEDISCOUNT RATEDISCOUNT RATESECONOMIC DEVELOPMENTECONOMIC DYNAMICSECONOMIC GROWTHECONOMIC THEORYECONOMIES OF SCALEECONOMISTSELASTICITYEMISSIONEMISSION INTENSITYEMISSION PERMITSEMISSIONSEMISSIONS INTENSITYENERGY USEENVIRONMENTALENVIRONMENTAL DEGRADATIONENVIRONMENTAL QUALITYENVIRONMENTAL RESOURCESENVIRONMENTSEXOGENOUS PARAMETERSEXTERNALITYFACTORS OF PRODUCTIONFINANCIAL SUPPORTFUTURE CONSUMPTIONGHGGHGSGREENHOUSEGREENHOUSE GASGREENHOUSE GAS EMISSIONSGREENHOUSE GASESGROSS INVESTMENTGROSS OUTPUTGROWTH MODELGROWTH MODELSGROWTH PATHGROWTH PROBLEMGROWTH THEORYHUMAN CAPITALIMPACTS OF CLIMATE CHANGEINCOMEINCOME LEVELSINCOME PER CAPITAINCREASING RETURNSINCREASING RETURNS TO SCALEINDUSTRIALIZATIONLABOR FORCELOW-CARBONLOWER DISCOUNT RATEMARGINAL UTILITYNATURAL CAPITALNATURAL RESOURCE ECONOMICSNATURAL RESOURCE SCARCITYNATURAL RESOURCESNEGATIVE IMPACTNET OUTPUTNUMERICAL SIMULATIONSOPPORTUNITY COSTOPTIMIZATIONPHPOLITICAL ECONOMYPOLLUTIONPOPULATION GROWTHPPPRESENT VALUEPRODUCTION FUNCTIONPRODUCTION FUNCTIONSPRODUCTION TECHNOLOGYPRODUCTIVITYPRODUCTIVITY OF CAPITALSCENARIOSSHADOW PRICESTRUCTURAL CHANGESUBSTITUTIONSUSTAINABLE DEVELOPMENTTECHNICAL CHANGETECHNOLOGICAL INNOVATIONTECHNOLOGY INCREASESTOTAL CONSUMPTIONUNCERTAINTIESUNIT OF CAPITALUTILITY FUNCTION10.1596/1813-9450-6951