Net-zero emissions and rising income levels can both be achieved simultaneously

Balancing cleaner air with rising incomes is not a luxury question for developing countries. It is a real-world, and real-life, policy problem that shapes health, jobs, and the future of their cities.

A new study lays out when zero emissions can go hand in hand with steady growth, even when governments rely on foreign aid.

Zero emissions and economic growth

The work comes from Hideo Noda at the Tokyo University of Science (TUS) with coauthor Fengqi Fang, a Ph.D. candidate in Business Administration from the Graduate School of Business Administration at TUS.

The team builds a simple but testable way to check if a country can hit zero net emissions while its economy keeps expanding.

They also verify the model numerically using real world style parameters so it is not just a chalkboard exercise.

The paper connects theory to a specific United Nations target on decoupling growth from environmental damage.

Zero emissions models

First, the authors define a zero-emissions policy as keeping net pollution at zero at every point in time, by matching abatement to emissions. That requires money, technology, and clear rules to assign who pays.

They run two versions of the economy.

One is a public goods model where government services like roads or schools lift private production for everyone at once, a standard growth model introduced by Robert Barro in 1990.

The second adds congestion, where more people share the same public services so the boost per person shrinks.

Minimum income rule

The key test is whether gross domestic product (GDP) per capita rises above a minimum income threshold so a country can fully clean what it emits.

The authors call this the kindergarten rule level of abatement, as in: “clean-up what you make dirty.”

“Following the Kindergarten rule means implementing zero emission technologies in either finite time or asymptotically,” noted M. Scott Taylor and William Brock in their related study.

This frame anchors the new threshold concept for developing countries.

Aid supports clean income growth

Many low income governments fund services with official development assistance (ODA), so the model lets outside aid pay for both cleaning and public services.

That design reflects classic work showing how aid aimed at productive public services can shift long run growth.

In related theory, flexible labor and aid tied to public capital influence the path of output and welfare. The new paper extends this logic to pollution control that must be paid for every year.

Changing income threshold

The threshold depends on clean technology, population size, and how much aid is fixed to environmental uses. Better abatement technology lowers the income bar because each dollar of cleanup removes more pollution.

Population matters differently across the two models. In the public goods case, a larger labor force can raise growth because services scale with the economy, while in the congestion case that scale effect drops out as services get diluted.

Taxes and zero emissions targets

The model also looks at tax policy, focusing on a labor income tax that finances services.

There is a tax rate that maximizes the growth of income per person, and under both models governments can reach the needed income threshold in finite time if they choose that growth maximizing rate.

Public services that complement private capital are the link. When governments tax and spend on those services efficiently, private firms produce more and the economy climbs to the income level that makes full abatement feasible.

“Both models indicate that implementing the zero-emissions policy is compatible with sustainable economic growth,” wrote Noda.

They also show the kindergarten rule threshold is higher with congestion than without it, so crowding of public services slows the crossing.

“We call this threshold the kindergarten rule level of pollution abatement in terms of GDP per capita,” wrote Noda. The result gives policymakers a clear income target, not just a slogan about decoupling.

Income growth and SDGs

Target 8.4 of the Sustainable Development Goals (SDGs) asks countries to decouple growth from environmental degradation.

The authors argue their framework helps explain when that is possible in practice, and how policy levers change the timing.

The UN defines the target as improving resource efficiency and decoupling growth from environmental harm through 2030. The paper’s threshold view fits that mandate with a concrete yardstick.

Why results still matter

Earlier work in the same research stream focused on developed, innovation-driven economies and showed that zero emissions could be achieved alongside continued growth.

That study examined whether sustained economic expansion could occur while also maintaining zero net pollution emissions.

The new paper shows the same compatibility can hold in aid dependent settings where innovation is not the main growth engine.

That extension fills a real gap, because many low income countries face tighter fiscal and technological limits.

Build or buy cleaner technology so the threshold falls. Treat tied aid for environmental programs as a growth tool and not just a cost center.

Set tax policy to raise the growth rate of income per person, then sustain it long enough to pass the threshold. Guard against congestion by scaling services with population, so gains are not diluted.

The study is published in The Singapore Economic Review.

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