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.