ABSTRACT
We represent in a formal model a policy argument concerning the pertinence of the adoption of a restrictive environmental policy limiting the use of abundant fossil energy resources in developing countries. The argument highlights the risk that such a policy may halt economic development, and therefore impose persistent environmental damages, as well as lower consumption levels.  One  assumption is crucial for the argument to hold: polluting fossil energy is an essential input over the early phase of economic development, but not in the later phases following structural change. It is an empirically plausible case. Using the model we characterize the dynamics of the efficient stance of environmental policy, i.e. fossil energy use, and compare regulation under alternative objectives and abilities to foresee the impact of structural change. Two additional arguments are considered, potentially impacting the relative benefit from implementing a strict stance of environmental policy early on in developing economies.
This is joint work with Dorothée Charlier (Univ Savoie Mont-Blanc, IREGE) and Aude Pommeret (Univ Savoie Mont-Blanc, IREGE)..