Pollution control in an uncertain environment

Yacov Tsur, Amos Zemel

    Research output: Contribution to journalArticlepeer-review

    66 Scopus citations

    Abstract

    The effects of the threat of occurrence of environmental catastrophes on optimal pollution control are considered. Recent analysis of irreversible events is extended to two types of reversible events: single-occurrence and multiple-occurrence (recurrent) events. While it is possible that the threat of irreversible events induces more pollution, we show that reversible events, under quite general conditions, induce more conservation (less pollution). The analysis is carried out via a simple method (the 'hδ-method') to.identify optimal steady states by comparing steady state policies with small variations from them. For recurrent events the optimal state process must approach a unique steady state from any initial level. In this case, the hδ-method characterizes the dynamic behavior of the optimal state process without actually solving for it.

    Original languageEnglish
    Pages (from-to)967-975
    Number of pages9
    JournalJournal of Economic Dynamics and Control
    Volume22
    Issue number6
    DOIs
    StatePublished - 1 Jan 1998

    Keywords

    • Environmental uncertainty
    • Pollution management
    • Reversible events

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