IDEAS home Printed from https://ideas.repec.org/a/ses/arsjes/1996-iv-4.html
   My bibliography  Save this article

Pollution Control in a Stochastic Environment

Author

Listed:
  • Thomas Wiedmer
  • Anthony C. Fisher
  • Urvashi Nahrain

Abstract

This paper sets up a model using stochastic dynamic programming to analyze pollution control decisions. Environmental decision making is characterized by both uncertainty and irreversibility: Uncertainty might be related to future costs and benefits of adopting a particular control policy. Irreversibility may arise when investments in abatement capital are irreversible, or when environmental damage becomes irreversible at a certain point in time. Under such circumstances, the question of the optimal timing of pollution control arises. This paper shows that: (1) Increases in the uncertainty of future control benefits lead to a lower current degree of pollution control if investment in control facilities is irreversible, (2) ignoring the possibility of new information in the future leads to a higher level of control than it is optimal, and (3) the possibility of a major catastrophe may result in a lower optimal degree of pollution control.

Suggested Citation

  • Thomas Wiedmer & Anthony C. Fisher & Urvashi Nahrain, 1996. "Pollution Control in a Stochastic Environment," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 132(IV), pages 575-590, December.
  • Handle: RePEc:ses:arsjes:1996-iv-4
    as

    Download full text from publisher

    File URL: http://www.sjes.ch/papers/1996-IV-4.pdf
    Download Restriction: no
    ---><---

    More about this item

    Statistics

    Access and download statistics

    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:ses:arsjes:1996-iv-4. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Kurt Schmidheiny (email available below). General contact details of provider: https://edirc.repec.org/data/sgvssea.html .

    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.