Land use dynamics and the environment

We build a benchmark framework to study optimal land use, encompassing land use activities and environmental degradation. We focus on the spatial externalities of land use as drivers of spatial patterns : even if land is immobile by nature, location's actions affect the whole space through pollution, which flows across locations resulting in both local and global damages. In contrast to the previous literature on spatial dynamics, we prove that the social optimum problem is well-posed, i.e., the solution exists and is unique. Taking advantage of this result, we illustrate the richness of our model by means of a numerical analysis. Considering a global dynamic algorithm, we find that our model reproduces a great variety of spatial patterns related to the interaction between land use activities and the environment. In particular, we identify the central role of abatement technology as pollution stabilizer, allowing the economy to achieve stable steady states that are spatially heterogeneous.