Marwil J. Dávila-Fernández
DEPS, USiena
Serena Sordi
DEPS, USiena
Abstract
In a recent article published in Ecological Economics, Guarini and Porcile (2016) expanded the Balance-of-Payments Constraint (BoPC) growth model in order to address the challenges posed by greenhouse gas emissions suggesting a way in which environmental variables can be included in the structure of this family of models. Building on their set up, we incorporate how people with di¤erent environmental attitudes or sentiments influence each other and contribute to the design of environmental policies. We detail the concept of transition probabilities for the agent's switching from pro- to anti-enviromental positions and vice-versa and discuss the macroeconomic results that follow. Numerical simulations allow us to investigate in more detail the implications of the validity of Porter's hypothesis as well as decoupling conditions.
Keywords
Sustainability, Open economy, Environmental innovation, Porter's hypothesis, Thirwall's Law.
Jel Codes
E12; F43; Q55; Q56; Q57
