A theory of economic growth with material/energy resources and dematerialization: Interaction of three growth mechanisms

• Published in: Ecological economics Vol. 55; no. 1; pp. 96 - 118
• Main Authors: Ayres, Robert U., van den Bergh, Jeroen C.J.M.
• Format: Journal Article
• Language: English
• Published: Elsevier B.V 01.10.2005; Elsevier
• Series: Ecological Economics
• Subjects: Economic growth; Economic resources; Economic theory; Environmental economics; Environmental Kuznets curve; Fossil fuels; Growth mechanisms; Growth theory; Natural resources; Production function; Production functions; Structural change; Value creation; Q32; Q43; Growth mechanisms; Value creation; Production function; O41; Environmental Kuznets curve; O11; O33; Structural change
• ISSN: 0921-8009; 1873-6106
• DOI: 10.1016/j.ecolecon.2004.07.023

The nature of energy and material resources in a non-optimizing growth theory framework is clarified. This involves two modifications of the conventional theory. Firstly, multiple feedback mechanisms or “growth engines” are identified, such that the impact of the cost of production through demand on growth is accounted for. Secondly, a production function distinguishes between resource use, technical efficiency, and value creation. The resulting model is analytically solved under the condition of a constant growth rate. Given model complexity, numerical experiments are performed as well, providing relevant insights to the academic and political debates on ‘environmental Kuznets curves’ and ‘dematerialization.’