In this paper I investigate the role of an increasingly demanded class of green services, characterised by having strong roots in local communities, high human labour intensity, flat labour productivity growth and a low impact on the environment. In order to do so, I build an endogenous growth model with a progressive manufacturing sector and a stagnant service sector. Productivity growth in the former sector is driven by the presence of a public stock of capital, representing infrastructure. The progressive sector also generates a negative externality on an open-access renewable resource that enters the households welfare function. I thus study the long-run behaviour of the economy and present a numerical example to analyse the transition during which structural change takes place. Results show the possibility of a conflict between growth and welfare by investigating the effects of a change in some relevant policy and technological parameters.
