The World’s Largest Open Access Agricultural & Applied Economics Digital Library 
      
                                       
                                       
     This document is discoverable and free to researchers across the 
                 globe due to the work of AgEcon Search. 
                                       
                                       
                                       
                      Help ensure our sustainability. 
      
                               Give to AgEcon Search 
                                       
                                       
                                       
                                       
                                       
                                       
                                       
                                 AgEcon Search 
                             http://ageconsearch.umn.edu 
                                aesearch@umn.edu 
                                       
                                       
                                       
      
      
      
      
      
      
     Papers downloaded from AgEcon Search may be used for non-commercial purposes and personal study only. 
     No other use, including posting to another Internet site, is permitted without permission from the copyright 
     owner (not AgEcon Search), or as allowed under the provisions of Fair Use, U.S. Copyright Act, Title 17 U.S.C. 
      
      
                                
                           The Roles of the Environment and 
                           Natural Resources in Economic Growth 
                           Analysis  
                           Michael Toman 
                           May 2003 • Discussion Paper 02–71 
                                        
                            
                           Resources for the Future 
                           1616 P Street, NW 
                           Washington, D.C. 20036 
                           Telephone: 202–328–5000 
                           Fax: 202–939–3460 
                           Internet: http://www.rff.org 
                                
                           © 2002 Resources for the Future. All rights reserved. No 
                           portion of this paper may be reproduced without permission of
                           the authors. 
                           Discussion papers are research materials circulated by their 
                           authors for purposes of information and discussion. They have
                           not necessarily undergone formal peer review or editorial 
                           treatment. 
                                
       The Roles of the Environment and Natural Resources in Economic 
                     Growth Analysis 
                       Michael Toman 
      Abstract 
         The primary aim of this paper is pedagogical.  We first present and discuss a “wiring 
      diagram” framework in order to elucidate the general links between economic growth and 
      "natural capital."  After developing the general framework, we develop parallel frameworks 
      applicable to several specific sectors of the economy (agriculture, forestry, and manufacturing).  
      Two appendices provide a mathematical formulation of the economy-wide framework and a 
      brief historical review of the role of natural resources and the environment in economic growth 
      theory. 
      Key Words:  economic growth. natural resources. sustainable development 
      JEL Classification Numbers:  Q00, O1 
                           
        Contents 
         
        1.   Introduction....................................................................................................................... 1 
        2.  A Schematic Representation of the Roles of Natural Resources and the                                                       
          Environment in Economic Growth................................................................................. 3 
        3.   Sectoral-Level Economy-Environment Linkages:  Agriculture.................................. 8 
        4.  Sectoral-Level Economy-Environment Linkages: Rotation Forestry and................. 10 
        Non-Timber Forest Products and Services......................................................................... 10 
        5.  Sectoral-Level Economy-Environment Linkages:  Manufacturing............................ 13 
        6.   Conclusions and  Empirical Challenges....................................................................... 14 
        References.............................................................................................................................. 34