Working Paper

Economic Challenges in the Anthropocene

Ignazio Musu
CESifo, Munich, 2013

CESifo Working Paper No. 4530

The evolution during the Anthropocene is analyzed through the interaction between economic and technological development, characterized by the role of fossil fuels and by the progressive dominance of those with a higher energy and density power. The challenge is how to make the rising demand for economic growth, mainly coming from developing and emerging countries, compatible with the sustainability of the processes concerning the Earth system. Mainly by focusing on the energy-environment challenge, it is claimed that the required technological breakthrough will not be possible without an appropriate combination of environmental and innovation policies. The big size of the needed investments in a context of limited financial resources asks for a strong support and definition of precise priorities by the governments. A strong help will come from a cultural change able to determine a more sustainable demand for goods and services and a new system of social norms.

CESifo Category
Public Choice
Resources and Environment
Keywords: economic development, technical change, sustainability, environment, energy
JEL Classification: O100, O300, Q400, Q500