A growth model incorporating dynamics of capital per capita, atmospheric CO2 concentration, and labor and energy productivity is described.
In the “medium run” output and employment are determined by effective demand in contrast to most models of climate change. In a “long run” of several centuries the model converges to a stationary state with zero net emissions of CO2. Properties of dismal and non-dismal stationary states are explored, with a latter requiring a relatively high level of investment in mitigation of emissions. Without such investment under “business as usual” output dynamics are strongly cyclical in numerical simulations. There is strong output growth for about eight decades, then a climate crisis, and output crash.
