Public Debt, Life Expectancy and the Environment Dette publique, Espérance de vie et Environnement

This paper aims to provide policy recommendations to improve both environmental quality and growth in the context of debt consolidation. For that purpose, we develop an overlapping generation model in which we in-clude public debt, and we modelize the two-way causality between life expectancy and the environment. We use a phase diagram to demonstrate the possibility of an environmental poverty trap. Using comparative statics around steady states, we find that a voluntary environmental policy may allow a country to escape the environ-mental poverty trap, or may help a country to reach a higher level of development. This paper also argues in favor of debt-for-nature swap mechanisms. Finally, by means of a welfare analysis, we find that public debt is a useful instrument to simultaneously solve the capital over-accumulation problem and reach environmental objectives, but it must be used with caution. Résumé L’objectif de cet article est de donner quelques recommandations de politique économique favorisant simul-tanément la croissance et une bonne qualité environnementale, dans un contexte de consolidation des finances publiques. C’est dans ce but que l’on développe un modèle à générations imbriquées dans lequel on inclut de la dette publique et on modélise une causalité à double sens entre qualité environnementale et espérance d