A survey of sustainable development in economic growth theory : achievements and future directions

Environmental policy for the energy sector is important for achieving sustainable development. However, there is a strong opposition to environmental policies, which, while encouraging pollution reduction, lead to unemployment and low growth due to the stagnation of industrial activity. In particular, energy-intensive industries tend to be less productive, and strict environmental policies can lead to unemployment. As energy non-intensive industries, such as information and communication and service industries drive economic growth, environmental policies will lead to economic inequalities. Uncovering the mechanisms of sustainable development will provide clues to solving the problem. This chapter surveys studies that analyze, within the framework of economic growth theory, the mechanisms by which environmental policies, such as environmental taxes and emissions trading, lead to economic growth and welfare improvements in addition to pollution reductions.