TY - JOUR
T1 - Pollution control in an uncertain environment
AU - Tsur, Yacov
AU - Zemel, Amos
PY - 1998/6
Y1 - 1998/6
N2 - 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.
AB - 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.
KW - Environmental uncertainty
KW - Pollution management
KW - Reversible events
UR - http://www.scopus.com/inward/record.url?scp=0032084838&partnerID=8YFLogxK
U2 - 10.1016/s0165-1889(97)00087-0
DO - 10.1016/s0165-1889(97)00087-0
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AN - SCOPUS:0032084838
SN - 0165-1889
VL - 22
SP - 967
EP - 975
JO - Journal of Economic Dynamics and Control
JF - Journal of Economic Dynamics and Control
IS - 6
ER -