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Optimal Sustainable Policies under Pollution Ceiling: The Demographic Side

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  • Raouf Boucekkine

    ()
    (Aix-Marseille University (Aix-Marseille School of Economics, CNRS & EHESS, IRES and CORE, Université Catholique de Louvain.)

  • Blanca Martinez

    ()
    (Universidad Complutense de Madrid)

  • Ramon Ruiz-Tamarit

    ()
    (Department of Economic Analysis, Universitat de Valencia, Spain, and IRES Department of Economics, Université Catholique de Louvain, Belgium.)

Abstract

We study optimal sustainable policies in a benchmark logistic world (where both population and technological progress follow logistic laws of motion) subject to a pollution ceiling. The main policy in the hands of the benevolent planner is pollution abatement, ultimately leading to the control of a dirtiness index as in the early literature of the limits to growth literature. Besides inclusion of demographic dynamics, we also hypothesize that population size affects negatively the natural regeneration or assimilation rate, as a side product of human activities (like increasing pollution, deforestation, ...). We first characterize optimal sustainable policies. Under certain conditions, the planner goes to the pollution ceiling value and stays on, involving a more stringent environmental policy and a sacrifice in terms of consumption per capita. Second, we study how the sustainable problem is altered when we depart from the logistic world by considering exponential technical progress (keeping population growth logistic). It's shown that, as expected, introducing such an asymmetry widens the margins of optimal policies as sustainable environmental policies are clearly less stringent under exponential technical progress. Third we connect our model to the data, using in particular UN population projections.

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Bibliographic Info

Paper provided by Aix-Marseille School of Economics, Marseille, France in its series AMSE Working Papers with number 1354.

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Length: 30 pages
Date of creation: 04 Nov 2013
Date of revision: 04 Nov 2013
Handle: RePEc:aim:wpaimx:1354

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Web page: http://www.amse-aixmarseille.fr/en
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Keywords: Limits to growth; Sustainable policy; Optimal growth; Demographic dynamics; Pollution ceiling;

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