ENVIRONMENTAL REGULATION, DIRECTED TECHNOLOGICAL CHANGE, AND ECONOMIC GROWTH: FROM THE PERSPECTIVE OF GREEN GROWTH

For the problem concerning how the implementation of environmental regulations should be performed, one must examine their impacts on the selection of directed technological innovations to achieve green growth. A nonlinear control model was created in which the constraint is to constantly improve the quality of the environment and ensure a consistent and balanced growth rate with the objective function being the goal of using green growth to maximize social welfare. Using optimal control theory and the maximum principle, we separately obtained the qualitative expression of capital allocation and optimal consumption growth. The model simulation results illustrate the following points: although brown capital is superior in production flexibility in the process of capital accumulation, green capital is still an important pillar of support for maintaining the economic growth of a society as a whole; although brown capital is able to bring about a greater consumption growth rate, the implementation of environmental regulations is sufficient to promote capital allocation to shift towards green technological innovation. In addition, greater emphasis in this aspect shall be more useful for the usage of green capital and play a more effective role in the use of green technological innovation to achieve green growth.