The developing world is experiencing substantial environmental change, and climate change is likely to accelerate these processes in the coming decades. Due to their relatively high dependence on environmental capital for their livelihoods, and to their limited resources for mitigation and investment in adaptation, the poor are likely to suffer most. Economic growth is essential for any large-scale poverty reduction.
Much of the rural poor -- who are growing in number -- are concentrated in ecologically fragile and remote areas. The key ecological scarcity problem facing such poor households is a vicious cycle of declining livelihoods, increased ecological degradation and loss of resource commons, and declining ecosystem services on which the poor depend. In addition, developing economies with high concentrations of their populations on fragile lands and in remote areas not only display high rates of rural poverty, but also are some of the poorest countries in the world today. Policies to eradicate poverty therefore need to be targeted at the poor where they live, especially the rural poor clustered in fragile environments and remote areas.
A green growth agenda requires policy makers, from local to supranational levels, to examine and influence behavior that impacts economic, social, and environmental outcomes on multiple scales. Behavioral and social change, in addition or conjunction with technological change, is thus a crucial component of any green growth strategy. A better understanding of how and why people consume, preserve, or exploit resources or otherwise make choices that collectively impact the environment has important and far-reaching consequences for the predictive accuracy of more sophisticated models, both of future states of the world and of the likely impact of different growth strategies and potential risk management strategies. The prevailing characterization of human decision making in policy circles is a rational economic one. Reliance on the assumptions of rational choice excludes from consideration a wide range of factors that affect how people make decisions and therefore need to be considered in predictions of human reactions to environmental conditions or proposed policy initiatives.
Transportation is vital to economic and social development, but at the same time generates undesired consequences on local, regional, and global scales. One of the largest challenges is the mitigation of energy-related carbon dioxide emissions, to which this sector already contributes one-quarter globally and one-third in the United States. Technology measures are the prerequisite for drastically mitigating energy use and all emission species, but they are not sufficient. The resulting need for complementing technology measures with behavioral change policies contrasts sharply with the analyses carried out by virtually all energy / economy / environment (E3) models, given their focus on pure technology-based solutions. This paper addresses the challenges for E3 models to simulate behavioral changes in transportation. A survey of 13 major models concludes that especially hybrid energy models would already be capable of simulating some behavioral change policies, most notably the imposition of the full marginal societal costs of transportation.
This paper reviews dynamic general equilibrium models in order to collect insights on the interaction between economic growth and environmental issues. The authors discuss the Ramsey model and extend it for natural resource inputs and pollution, as well as for endogenous technical change. Green growth becomes within reach if there is good substitution, a clean backstop technology, a small share of natural resources in gross domestic product, and/or green directed technical change.