Population growth in polluting industrialization

Recently, many contributions have focused on the relationship between capital level, growth and population dynamics, introducing fertility choice in macro-dynamic models. In this paper, we go one step further highlighting also the link with pollution. We develop a simple overlapping generations model with paternalistic altruism according to wealth and environmental concerns. One can therefore explain a simultaneous increase in capital intensity, population growth and pollution, namely a polluting industrialization. We show in addition that a permanent productivity shock, possibly associated to technological innovations, promotes such a polluting development process, escaping a trap where the economy is relegated to low levels of capital intensity, population growth and pollution.

• First stages of development in terms of capital, population growth and pollution.
• Set an explanation of the industrialization process through agents’ behaviors.
• Role of interaction between environmental and demographic spheres in development.
• An economy may be relegated to a poverty trap but with low level pollution.
• A permanent technological shock allows to escape the trap.