Climate Change and Growth. Policy making for the environment

The master thesis's aim is the one of presenting the relation between growth and environmental degradation, and which are the tools the Governments can apply in order to reduce emissions. Particular focus is devoted to the reduction of Carbon Dioxide. A rich literature is concentrated on investigating the connection between economic development and negative environmental externalities. Especially, the relation explained with the Kuznets Curve (Kuznets, 1955; Grossman et al, 1991) results to be interesting: because of the dual effect of economic growth. On one hand, responsible of the emissions' growth and, on the other hand, related to their decrease too. Moreover, through the policy designing process, a wide spectrum of instruments has been defined, with a classification in two subgroups: market-based instruments, and non- market ones. After an initial part devoted to present the impact, and the continuing increasing relevance, of the GHGs in the atmosphere, and their relationship with the production process, a literature review is devoted to present the policies nowadays adopted. The empirical part is dedicated on proving the existence, or not, of an inverted U-shaped relation between production and emissions. Moreover, the existence of an N-shaped relationship will be tested too. In order to achieve the task, 32 European and non-European countries are investigated, for a 20 years long time horizon (1992-2012).