A cultural model of private provision and the environment |
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| Institution: | 1. UR: Matériaux Inorganiques, Faculté des Sciences, Université de Monastir, 5019 Monastir, Tunisia;2. Institut de Chimie de la Matière Condensée de Bordeaux, CNRS, Université Bordeaux I, 87, Avenue du Dr. A. Schweitzer, 33608 Pessac-Cedex, France;1. Department of Agribusiness and Agricultural Economics, University of Manitoba, 377-66 Dafoe Road, Winnipeg, Manitoba, Canada R3T 2N2;2. Department of Geography, University of Guelph, 50 Stone Road East, Guelph, Ontario, Canada N1G 2W1;1. Sanford School of Public Policy and Nicholas Institute for Environmental Policy Solutions, Duke University, United States;2. Resources for the Future, United States;3. National Bureau of Economic Research, United States;4. Center for Global Development, United States;5. Department of Economics and Curriculum for the Environment and Ecology, University of North Carolina at Chapel Hill, United States;1. Department of Environmental and Natural Resource Economics, University of Rhode Island, 1 Greenhouse Rd, Kingston, RI, 02881, USA;2. School of Public Policy, University of Maryland, 2101 Van Munching Hall, College Park, MD, 20742, USA |
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| Abstract: | This paper analyses an overlapping generations model of environmental externalities and capital accumulation where private contributions to environmental quality are motivated by a desire to socialize others into environmental attitudes. In this framework, the formation of environmental preferences is the result of a cultural transmission process depending on the extent of private contributions. In the short run, we show that three equilibria may arise: a first one where all green agents contribute to the environment, a second one where nobody contributes to the environment and a third interior one. We show that the capital-accumulation process and the change in preferences that occur in this economy lead the interior equilibrium to be selected, in which some, but not all, green agents contribute to the environment. The model thus provides an economic rationale for the gap between the number of people who care about the environment and the number who adopt pro-environmental behaviours. We also show that the fraction of contributors rises with capital, so that we explain the negative relationship between this gap and country income. Last, we show that this gap is particularly detrimental for welfare, and analyse the impact of a number of public policies. |
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| Keywords: | Private provision Environmental quality Overlapping generations Cultural transmission Growth |
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