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Optimal Abatement in Dynamic Multi-Pollutant Problems When Pollutants can be Complements or Substitutes

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  • Moslener, Ulf
  • Requate, Till

Abstract

We analyze a dynamic multi-pollutant problem where abatement costs of several pollutants are not separable. The pollutants can be either technological substitutes or complements. Environmental damage is induced by the stock of accumulated pollution. We find that optimal emission paths are qualitatively different for substitutes and complements. We derive general properties governing optimal emission paths and present numerical examples to illustrate our main results. In particular we find that optimal emission paths need not be monotonic, even for highly symmetric pollutants. Finally, we describe a comparatively simple method to implement the optimal path without explicitly knowing its shape. --

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Bibliographic Info

Paper provided by ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research in its series ZEW Discussion Papers with number 05-27.

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Date of creation: 2005
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Handle: RePEc:zbw:zewdip:3183

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Keywords: Multi-pollution; abatement technology; accumulating pollutants;

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References

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  1. Daniel Phaneuf & Till Requate, 2002. "Incentives for Investment in Advanced Pollution Abatement Technology in Emission Permit Markets with Banking," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 22(3), pages 369-390, July.
  2. Repetto, Robert, 1987. "The policy implications of non-convex environmental damages: A smog control case study," Journal of Environmental Economics and Management, Elsevier, vol. 14(1), pages 13-29, March.
  3. Cansier, Adrienne & Cansier, Dieter, 1999. "Umweltstandards bei Unsicherheit aus entscheidungstheoretischer Sicht," Tübinger Diskussionsbeiträge 170, University of Tübingen, School of Business and Economics.
  4. Leightner, Jonathan E., 1999. "Weather-induced changes in the tradeoff between SO2 and NOx at large power plants," Energy Economics, Elsevier, vol. 21(3), pages 239-259, June.
  5. Böhringer, Christoph & Löschel, Andreas & Rutherford, Thomas F., 2004. "Efficiency Gains from "What"-Flexibility in Climate Policy: An Integrated CGE Assessment," ZEW Discussion Papers 04-48, ZEW - Zentrum für Europäische Wirtschaftsforschung / Center for European Economic Research.
  6. Yates, Andrew J. & Cronshaw, Mark B., 2001. "Pollution Permit Markets with Intertemporal Trading and Asymmetric Information," Journal of Environmental Economics and Management, Elsevier, vol. 42(1), pages 104-118, July.
  7. Michaelis, P., 1999. "Sustainable greenhouse policies: the role of non-CO2 gases," Structural Change and Economic Dynamics, Elsevier, vol. 10(2), pages 239-260, June.
  8. Jean-Marc Burniaux, 2000. "A Multi-Gas Assessment of the Kyoto Protocol," OECD Economics Department Working Papers 270, OECD Publishing.
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Citations

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Cited by:
  1. Baumgärtner, Stefan & Jöst, Frank & Winkler, Ralph, 2009. "Optimal dynamic scale and structure of a multi-pollution economy," Ecological Economics, Elsevier, vol. 68(4), pages 1226-1238, February.
  2. Agee, Mark D. & Atkinson, Scott E. & Crocker, Thomas D. & Williams, Jonathan W., 2014. "Non-separable pollution control: Implications for a CO2 emissions cap and trade system," Resource and Energy Economics, Elsevier, vol. 36(1), pages 64-82.
  3. Regnier Camille & Sophie Legras, 2014. "Urban Structure and Environmental Externalities," INRA UMR CESAER Working Papers 2014/2, INRA UMR CESAER, Centre d'’Economie et Sociologie appliquées à l'’Agriculture et aux Espaces Ruraux.
  4. Ambec, Stefan & Coria, Jessica, 2011. "Prices vs Quantities with Multiple Pollutants," Working Papers in Economics 517, University of Gothenburg, Department of Economics.
  5. Ralph Winkler, 2008. "Optimal control of pollutants with delayed stock accumulation," CER-ETH Economics working paper series 08/91, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
  6. Anke Gerber & Philipp Wichardt, 2013. "On the Private Provision of Intertemporal Public Goods with Stock Effects," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 55(2), pages 245-255, June.
  7. Krysiak, Frank C., 2011. "Environmental regulation, technological diversity, and the dynamics of technological change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 528-544, April.
  8. Legras, Sophie, 2010. "Managing correlated stock externalities: water taxes with a pinch of salt," Environment and Development Economics, Cambridge University Press, vol. 15(03), pages 275-292, June.
  9. Kuosmanen, Timo & Laukkanen, Marita, 2009. "(In)Efficient Management of Interacting Environmental Bads," Discussion Papers 54287, MTT Agrifood Research Finland.
  10. Pierre-André Jouvet & Marie Renner, 2014. "Social Acceptance and Optimal Pollution: CCS or Tax?," Working Papers 1403, Chaire Economie du Climat.
  11. Sophie Legras, 2011. "Incomplete model specification in a multi-pollutants setting : the case of climate change and acidification," Working Papers 44262, Institut National de la Recherche Agronomique, France.
  12. Wei-Bin Zhang, 2013. "Dynamic Interactions among Growth, Environmental Change, Habit Formation, and Preference Change," The International Journal of Economic Behavior - IJEB, Faculty of Business and Administration, University of Bucharest, vol. 3(1), pages 3-25, December.
  13. Legras, Sophie, 2011. "Incomplete model specification in a multi-pollutants setting: The case of climate change and acidification," Resource and Energy Economics, Elsevier, vol. 33(3), pages 527-543, September.
  14. Ralph Winkler, 2008. "Optimal compliance with emission constraints: dynamic characteristics and the choice of technique," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 39(4), pages 411-432, April.

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