Modelling Sustainable Development

Modelling Sustainable Development

Transitions to a Sustainable Future

The Fondazione Eni Enrico Mattei series on Economics, the Environment and Sustainable Development

Edited by Valentina Bosetti, Reyer Gerlagh and Stefan P. Schleicher

This insightful book explores the issue of sustainable development in its more operative and applied sense. Although a great deal of research has addressed potential interpretations and definitions of sustainable development, much of this work is too abstract to offer policy-makers and researchers the feasible and effective guidelines they require. This book redresses the balance.

Chapter 6: Technical Progress in TranSust Models

Valentina Bosetti and Marzio Galeotti

Subjects: economics and finance, environmental economics, environment, environmental economics


Valentina Bosetti and Marzio Galeotti 6.1 INTRODUCTION Technological change is a major force in a country’s economic growth. Since before the industrial revolution, economies and societies have first relied on wind, water, animal power and wood, then on coal, and finally on natural gas and petroleum. Today, many technologies utilize fossil fuels, which has led to the release of large amounts of carbon to the atmosphere, and the scientific consensus is that these releases will cause the earth’s climate to change. Fortunately, however, technology changes over time. Technological innovation is increasingly seen as one of the main practical keys for reconciling the current fundamental conflict between economic activity and the environment. No one really believes or is ready to accept that the solution of the climate change problem consists of reducing the pace of economic growth. Instead, it is believed that changes in technology will bring about the longed decoupling of economic growth from generation of polluting emissions. There is a difference in attitude in this respect, though. Some maintain a faithful view that technological change, having a life of its own, will automatically solve the problem. In contrast, others express the conviction that the process of technological change by and large responds to impulses and incentives, and it therefore has to be fostered by appropriate policy actions. Technological change generally leads to the substitution of obsolete and dirty technologies with cleaner ones. However, technical change is not per se always environment-friendly, as it can lead to the emergence of...

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