IDEAS home Printed from https://ideas.repec.org/a/nas/journl/v119y2022pe2202679119.html
   My bibliography  Save this article

On the optimal management of environmental stock externalities

Author

Listed:
  • Anastasios Xepapadeas

    (a Department of Economics, University of Bologna, Bologna 47921, Italy;; b Athens University of Economics and Business, Athens 104 34, Greece)

Abstract

A very important class of pollutants includes those for which the pollution stock is built into the ambient environment as emissions accumulate at a rate exceeding that which natural processes can absorb. Examples are greenhouse gases which cause climate change, accumulation of nutrients which contribute to nitrate pollution, and acid depositions in soil. This paper studies the management of environmental stock pollutants when potential polluters decide about pollution by taking into account the actions of others, and pollutants accumulate with time but are also transported across space. Directions are explored for extending traditional management approaches to pollutants evolving in both space and time when polluters act strategically, and spatially dependent vs spatially uniform environmental and resource management policies are discussed.

Suggested Citation

  • Anastasios Xepapadeas, 2022. "On the optimal management of environmental stock externalities," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 119(24), pages 2202679119-, June.
    • Handle: RePEc:nas:journl:v:119:y:2022:p:e2202679119
    as

    Download full text from publisher

    File URL: http://www.pnas.org/content/119/24/e2202679119.full
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Kossioris, G. & Plexousakis, M. & Xepapadeas, A. & de Zeeuw, A., 2011. "On the optimal taxation of common-pool resources," Journal of Economic Dynamics and Control, Elsevier, vol. 35(11), pages 1868-1879.
    2. William Brock & Anastasios Xepapadeas, 2019. "Regional Climate Change Policy Under Positive Feedbacks and Strategic Interactions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(1), pages 51-75, January.
    3. de Frutos, Javier & Martín-Herrán, Guiomar, 2019. "Spatial effects and strategic behavior in a multiregional transboundary pollution dynamic game," Journal of Environmental Economics and Management, Elsevier, vol. 97(C), pages 182-207.
    4. Kyriakopoulou, Efthymia & Xepapadeas, Anastasios, 2013. "Environmental policy, first nature advantage and the emergence of economic clusters," Regional Science and Urban Economics, Elsevier, vol. 43(1), pages 101-116.
    5. Brock, W. & Xepapadeas, A., 2017. "Climate change policy under polar amplification," European Economic Review, Elsevier, vol. 99(C), pages 93-112.
    6. David Zilberman, 2008. "The Gains from Differentiated Policies to Control Stock Pollution when Producers Are Heterogeneous," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 90(4), pages 1059-1073.
    7. Brock, William & Xepapadeas, Anastasios, 2010. "Pattern formation, spatial externalities and regulation in coupled economic-ecological systems," Journal of Environmental Economics and Management, Elsevier, vol. 59(2), pages 149-164, March.
    8. Brock, William & Engström, Gustav & Xepapadeas, Anastasios, 2014. "Spatial climate-economic models in the design of optimal climate policies across locations," European Economic Review, Elsevier, vol. 69(C), pages 78-103.
    9. Efthymia Kyriakopoulou & Anastasios Xepapadeas, 2017. "Atmospheric pollution in rapidly growing industrial cities: spatial policies and land use patterns," Journal of Economic Geography, Oxford University Press, vol. 17(3), pages 607-634.
    10. Frederick Ploeg & Aart Zeeuw, 1992. "International aspects of pollution control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 117-139, March.
    11. W.A. Brock & A. Xepapadeas & A.N. Yannacopoulos, 2014. "Optimal Control in Space and Time and the Management of Environmental Resources," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 33-68, October.
    12. Yongyang Cai & William Brock & Anastasios Xepapadeas, 2023. "Climate Change Impact on Economic Growth: Regional Climate Policy under Cooperation and Noncooperation," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 10(3), pages 569-605.
    13. Lars Peter Hansen & Jianjun Miao, 2018. "Aversion to ambiguity and model misspecification in dynamic stochastic environments," Proceedings of the National Academy of Sciences, Proceedings of the National Academy of Sciences, vol. 115(37), pages 9163-9168, September.
    14. Frederick Ploeg & Aart Zeeuw, 2016. "Non-cooperative and Cooperative Responses to Climate Catastrophes in the Global Economy: A North–South Perspective," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 65(3), pages 519-540, November.
    15. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329.
    16. Dieter Grass & Anastasios Xepapadeas & Aart de Zeeuw, 2017. "Optimal Management of Ecosystem Services with Pollution Traps: The Lake Model Revisited," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 4(4), pages 1121-1154.
    17. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
    18. Xabadia, Angels & Goetz, Renan U. & Zilberman, David, 2008. "AJAE appendix for ‘The Gains from Differentiated Policies to Control Stock Pollution when Producers Are Heterogeneous’," American Journal of Agricultural Economics APPENDICES, Agricultural and Applied Economics Association, vol. 90(4), pages 1-9, February.
    19. Kossioris, G. & Plexousakis, M. & Xepapadeas, A. & de Zeeuw, A. & Mäler, K.-G., 2008. "Feedback Nash equilibria for non-linear differential games in pollution control," Journal of Economic Dynamics and Control, Elsevier, vol. 32(4), pages 1312-1331, April.
    20. Berck, Peter, 1981. "Optimal management of renewable resources with growing demand and stock externalities," Journal of Environmental Economics and Management, Elsevier, vol. 8(2), pages 105-117, June.
    21. Goetz, Renan U. & Zilberman, David, 2000. "The dynamics of spatial pollution: The case of phosphorus runoff from agricultural land," Journal of Economic Dynamics and Control, Elsevier, vol. 24(1), pages 143-163, January.
    22. Brock, William & Xepapadeas, Anastasios, 2008. "Diffusion-induced instability and pattern formation in infinite horizon recursive optimal control," Journal of Economic Dynamics and Control, Elsevier, vol. 32(9), pages 2745-2787, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fabio Antoniou & Panos Hatzipanayotou & Nikos Tsakiris, 2023. "Regulatory Stringency and Emission Leakage Mitigation," DEOS Working Papers 2302, Athens University of Economics and Business.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. William Brock & Anastasios Xepapadeas, 2020. "Spatial Environmental and Resource Economics," DEOS Working Papers 2002, Athens University of Economics and Business.
    2. W. A. Brock & A. Xepapadeas, 2015. "Modeling Coupled Climate, Ecosystems, and Economic Systems," Working Papers 2015.66, Fondazione Eni Enrico Mattei.
    3. de Frutos, Javier & Martín-Herrán, Guiomar, 2019. "Spatial vs. non-spatial transboundary pollution control in a class of cooperative and non-cooperative dynamic games," European Journal of Operational Research, Elsevier, vol. 276(1), pages 379-394.
    4. N. Baris Vardar & Georges Zaccour, 2020. "Exploitation of a Productive Asset in the Presence of Strategic Behavior and Pollution Externalities," Mathematics, MDPI, vol. 8(10), pages 1-28, October.
    5. Javier Frutos & Víctor Gatón & Paula M. López-Pérez & Guiomar Martín-Herrán, 2022. "Investment in Cleaner Technologies in a Transboundary Pollution Dynamic Game: A Numerical Investigation," Dynamic Games and Applications, Springer, vol. 12(3), pages 813-843, September.
    6. W.A. Brock & A. Xepapadeas & A.N. Yannacopoulos, 2014. "Optimal Control in Space and Time and the Management of Environmental Resources," Annual Review of Resource Economics, Annual Reviews, vol. 6(1), pages 33-68, October.
    7. Wagener, Florian & de Zeeuw, Aart, 2021. "Stable partial cooperation in managing systems with tipping points," Journal of Environmental Economics and Management, Elsevier, vol. 109(C).
    8. Torre, Davide La & Liuzzi, Danilo & Marsiglio, Simone, 2021. "Transboundary pollution externalities: Think globally, act locally?," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    9. Engelbert Dockner & Florian Wagener, 2014. "Markov perfect Nash equilibria in models with a single capital stock," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 56(3), pages 585-625, August.
    10. Anastasios Xepapadeas, 2010. "Modeling complex systems," Agricultural Economics, International Association of Agricultural Economists, vol. 41(s1), pages 181-191, November.
    11. Fouad El Ouardighi & Konstantin Kogan & Giorgio Gnecco & Marcello Sanguineti, 2018. "Commitment-Based Equilibrium Environmental Strategies Under Time-Dependent Absorption Efficiency," Group Decision and Negotiation, Springer, vol. 27(2), pages 235-249, April.
    12. Fouad El Ouardighi & Konstantin Kogan & Giorgio Gnecco & Marcello Sanguineti, 2020. "Transboundary pollution control and environmental absorption efficiency management," Annals of Operations Research, Springer, vol. 287(2), pages 653-681, April.
    13. Akihiko Yanase & Keita Kamei, 2022. "Dynamic Game of International Pollution Control with General Oligopolistic Equilibrium: Neary Meets Dockner and Long," Dynamic Games and Applications, Springer, vol. 12(3), pages 751-783, September.
    14. Hongxing Liu & Wendong Zhang & Elena Irwin & Jeffrey Kast & Noel Aloysius & Jay Martin & Margaret Kalcic, 2020. "Best Management Practices and Nutrient Reduction: An Integrated Economic-Hydrologic Model of the Western Lake Erie Basin," Land Economics, University of Wisconsin Press, vol. 96(4), pages 510-530.
    15. Catherine L. Kling & Raymond W. Arritt & Gray Calhoun & David A. Keiser, 2016. "Research Needs and Challenges in the FEW System: Coupling Economic Models with Agronomic, Hydrologic, and Bioenergy Models for Sustainable Food, Energy, and Water Systems," Center for Agricultural and Rural Development (CARD) Publications 16-wp563, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    16. Javier Frutos & Guiomar Martín-Herrán, 2018. "Selection of a Markov Perfect Nash Equilibrium in a Class of Differential Games," Dynamic Games and Applications, Springer, vol. 8(3), pages 620-636, September.
    17. Michèle Breton & Lucia Sbragia & Georges Zaccour, 2010. "A Dynamic Model for International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 45(1), pages 25-48, January.
    18. Boucekkine, Raouf & Fabbri, Giorgio & Federico, Salvatore & Gozzi, Fausto, 2022. "Managing spatial linkages and geographic heterogeneity in dynamic models with transboundary pollution," Journal of Mathematical Economics, Elsevier, vol. 98(C).
    19. Boucekkine, Raouf & Fabbri, Giorgio & Federico, Salvatore & Gozzi, Fausto, 2022. "A dynamic theory of spatial externalities," Games and Economic Behavior, Elsevier, vol. 132(C), pages 133-165.
    20. Bård Harstad, 2016. "The Dynamics Of Climate Agreements," Journal of the European Economic Association, European Economic Association, vol. 14(3), pages 719-752, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:nas:journl:v:119:y:2022:p:e2202679119. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Eric Cain (email available below). General contact details of provider: http://www.pnas.org/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.