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Pollution control under emission constraints: Switching between regimes

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  • Saltari, Enrico
  • Travaglini, Giuseppe

Abstract

In this paper we develop a model of pollution control. The aim of the society is to maximize the net social benefits which are negatively affected by the emission of pollutants. We show that the presence of an upper constraint on pollution growth rate affects the actual trajectory of emissions even when emissions are far below the level where the constraint binds. We get three main results. First, we find that for a society it is optimal to take into account the impact of the latent constraint at the outset of the planning horizon and to modify the emission flows even when the constraint is still slack. Second, we analyze how the constraint works effectively in the intermediate phases before the constraint binds. One crucial result is that the constraint on pollution growth may generate the unexpected result of increasing, instead of reducing, the emissions at the beginning and in the intermediate phases before the constraint binds. Finally, we state the boundary conditions to compute the optimal trajectory of emissions switching between regimes.

Suggested Citation

  • Saltari, Enrico & Travaglini, Giuseppe, 2016. "Pollution control under emission constraints: Switching between regimes," Energy Economics, Elsevier, vol. 53(C), pages 212-219.
  • Handle: RePEc:eee:eneeco:v:53:y:2016:i:c:p:212-219
    DOI: 10.1016/j.eneco.2014.07.010
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    References listed on IDEAS

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    Cited by:

    1. repec:bpj:jossai:v:5:y:2017:i:4:p:302-309:n:2 is not listed on IDEAS
    2. repec:spr:joevec:v:27:y:2017:i:5:d:10.1007_s00191-017-0516-6 is not listed on IDEAS
    3. Di Bartolomeo Giovanni & Saltari Enrico & Semmler Willi, 2017. "Inattention and pollution regulation policies," wp.comunite 00130, Department of Communication, University of Teramo.
    4. repec:kap:enreec:v:67:y:2017:i:4:d:10.1007_s10640-016-0010-x is not listed on IDEAS

    More about this item

    Keywords

    Pollution control; Inequality constraints; Net social benefits;

    JEL classification:

    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy

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