The impact of renewable versus non-renewable natural capital on economic growth

Farid Gasmi, Laura Recuero Virto and Denis Couvet ()
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Farid Gasmi: TSE-R - Toulouse School of Economics - UT Capitole - Université Toulouse Capitole - UT - Université de Toulouse - EHESS - École des hautes études en sciences sociales - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement
Denis Couvet: MNHN - Muséum national d'Histoire naturelle

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Abstract: In a dataset on 83 countries covering the years 1960–2009, we find a negative indirect effect of the share of renewable natural capital in wealth on economic growth transmitted through demographic factors, more specifically, population fertility. In contrast, in countries with lower income inequality and higher institutional quality, the share of non-renewable natural capital in wealth has a direct positive impact on growth. We also find that countries with higher income per capita, human development, and institutional quality have a higher share of renewable natural capital per capita, but a lower share of renewable natural capital in wealth. Renewable natural capital is thus valuable for the population and of primary concern for empowered countries, even though it contributes less to wealth and economic growth. Our results raise serious questions about the way wealth and growth are defined in economics when one investigates the impact of natural capital and point to the importance of preserving natural capital, particularly, in less developed countries.

Keywords: Natural capital; Renewable; Non-renewable; Economic growth (search for similar items in EconPapers)
Date: 2020-08
New Economics Papers: this item is included in nep-dem, nep-env and nep-gro
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Published in Environmental and Resource Economics, 2020, 77 (2), pp.271-333. ⟨10.1007/s10640-020-00495-0⟩

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Related works:
Journal Article: The Impact of Renewable Versus Non-renewable Natural Capital on Economic Growth (2020)
Working Paper: The impact of renewable versus non-renewable natural capital on economic growth (2019)
Working Paper: The impact of renewable versus non-renewable natural capital on economic growth (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-03164952

DOI: 10.1007/s10640-020-00495-0

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