The environmental Kuznets curve in a world of irreversibility (Q1016331)

Consider an overlapping generations model, where consumption produces an externality. This paper proves the existence of two equilibria in such a model, when pollution damage is potentially irreversible. At one of these equilibria, in contrast to \textit{A. John} and \textit{R. Pecchenino} [An overlapping generations model of growth and the environment, Econ. J. 104, 1393--1410 (1994)], the steady state of the economy is at the lowest possible sustainable leve. This result has grim implications for global warming.