Endogenous Economic Growth Under Low Carbon Constraints

The world’s economic developed rapidly, and the levels of energy use increasedsignificantly since the Industrial Revolution, which brought more and more seriousenvironmental problems.So many countries began to pay attentions to the worldwarming problem. Development of low-carbon economy has become the new modeof economic growth.In order to study whether a country’s economy is able to achieve rapid economicgrowth under the constraints of carbon emission reduction, The impact of carbonemission reduction constraints on economic growth is discussed in this article underthe endogenous growth theory framework. This article limit on the total level ofcarbon emissions rather than carbon emissions intensity. Simplicity we assumed thatenergy use is the sole source of carbon emissions and the only way for the economyto achieve carbon reduction goals is the reduction of fossil energy use. Technologicalimprovement will promote the growth of output and non-fossil energy use. At thesame time, we introduced people’s concerns of atmospheric carbon stock to theutility function, the increase in the stock of carbon in the atmosphere will reduce thepeople’s immediate utility. We analyzed the impact of carbon emission intensity andthe speed of carbon emission reduction on economic growth, and the conditions thatmust be met to achieve positive economic growth rate through the model.The study found that under certain constraints, there is a feasible and optimalsustainable growth path which can achieve the dual goals of economic growth andcarbon emission reduction. The improving of energy structure and technologicalprogress is the essential condition for economic growth. The impact of productionfunction as well as people’s degree of risk aversion, the concept of sustainabledevelopment on economic growth cannot be ignored. To achieve a low-carboneconomy should be step by step. Lower emission reduction targets should bedeveloped when the low-carbon infrastructure and technology is immature, whileincreasing the targets with the improvement of technology and economy.Finally, we put forward appropriate policy recommendations from the adjust of industrial structure, energy efficiency improvement and the increase of people’s thesustainable development concept.