Pollution Permits and Sustabinable Growth in a Schumpeterian Model.

In the chapter 4 of their book "Endogenous Growth Theory", P. Aghion and P. Howitt introduce environemental pollution in an aggregate Schumpeterian model and they characterize the optimal path. In this paper , we study the equilibria in a decentralized compatible with their model. First study the trade-off between environmental quality and growth, and we identify the channels of transmission of environmental policy on growth performance. Then we compute the tools which allow to implement the optimum.