Pollution control in an uncertain environment

Yacov Tsur*, Amos Zemel

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

78 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 - Jun 1998

Keywords

  • Environmental uncertainty
  • Pollution management
  • Reversible events

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