The paper develops a two-region endogenous growth model with climate change affecting the countries' capital stocks negatively. We compare two different policies aimed at supporting less developed countries: climate mitigation by rich countries, which diminishes the increase in stock pollution...

Endogenous growth theory has made many valuable contributions, perhaps most notably in providing the tools that permit more effective empirical investigation of the growth process. Its one shortcoming, which is stressed here, is its inability to live up to its name, for where it has failed is in...