IDEAS home Printed from
   My bibliography  Save this article

Production-based pollution versus deforestation: optimal policy with state-independent and-dependent environmental absorption efficiency restoration process


  • Fouad El Ouardighi

    () (ESSEC Business School)

  • Eugene Khmelnitsky

    (Tel Aviv University)

  • Marc Leandri

    (CEMOTEV – UVSQ-Université Paris Saclay)


An important yet largely unexamined issue is how the interaction between deforestation and pollution affects economic and environmental sustainability. This article seeks to bridge the gap by introducing a dynamic model of pollution accumulation where polluting emissions can be mitigated and the absorption efficiency of pollution sinks can be restored. We assume that emissions are due to a production activity, and we include deforestation both as an additional source of emissions and as a cause of the exhaustion of environmental absorption efficiency. To account for the fact that the switching of natural sinks to a pollution source can be either possible, and in such a case even reversible, or impossible, we consider that restoration efforts can be either independent from or dependent on environmental absorption efficiency, i.e., state-independent versus state-dependent restoration efforts. We determine (i) whether production or deforestation is the most detrimental from environmental and social welfare perspectives, and (ii) how state-dependent restoration process affects pollution accumulation and deforestation policies and the related environmental and social welfare consequences.

Suggested Citation

  • Fouad El Ouardighi & Eugene Khmelnitsky & Marc Leandri, 2020. "Production-based pollution versus deforestation: optimal policy with state-independent and-dependent environmental absorption efficiency restoration process," Annals of Operations Research, Springer, vol. 292(1), pages 1-26, September.
  • Handle: RePEc:spr:annopr:v:292:y:2020:i:1:d:10.1007_s10479-020-03638-0
    DOI: 10.1007/s10479-020-03638-0

    Download full text from publisher

    File URL:
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    1. Fabien Prieur, 2009. "The environmental Kuznets curve in a world of irreversibility," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 40(1), pages 57-90, July.
    2. Boucekkine, R. & Pommeret, A. & Prieur, F., 2013. "Optimal regime switching and threshold effects," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2979-2997.
    3. Daan van Soest & Robert Lensink, 2000. "Foreign Transfers and Tropical Deforestation: What Terms of Conditionality?," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 82(2), pages 389-399.
    4. Edward B. Barbier & Joanne C. Burgess, 1997. "The Economics of Tropical Forest Land Use Options," Land Economics, University of Wisconsin Press, vol. 73(2), pages 174-195.
    5. 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.
    6. Tahvonen, Olli & Salo, Seppo, 1996. "Nonconvexities in Optimal Pollution Accumulation," Journal of Environmental Economics and Management, Elsevier, vol. 31(2), pages 160-177, September.
    7. Marc Leandri & Mabel Tidball, 2017. "Assessing the sustainability of optimal pollution paths in a world with inertia," Working Papers 2017.10, FAERE - French Association of Environmental and Resource Economists.
    8. Tahvonen, Olli & Withagen, Cees, 1996. "Optimality of irreversible pollution accumulation," Journal of Economic Dynamics and Control, Elsevier, vol. 20(9-10), pages 1775-1795.
    9. Brent Sohngen & Robert Mendelsohn, 2003. "An Optimal Control Model of Forest Carbon Sequestration," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(2), pages 448-457.
    10. Keeler, Emmett & Spence, Michael & Zeckhauser, Richard, 1972. "The optimal control of pollution," Journal of Economic Theory, Elsevier, vol. 4(1), pages 19-34, February.
    11. Wirl, Franz, 2007. "Do multiple Nash equilibria in Markov strategies mitigate the tragedy of the commons?," Journal of Economic Dynamics and Control, Elsevier, vol. 31(11), pages 3723-3740, November.
    12. Engelbert Dockner & Gustav Feichtinger, 1991. "On the optimality of limit cycles in dynamic economic systems," Journal of Economics, Springer, vol. 53(1), pages 31-50, February.
    13. Costanza, Robert & Howarth, Richard B. & Kubiszewski, Ida & Liu, Shuang & Ma, Chunbo & Plumecocq, Gaël & Stern, David I., 2016. "Influential publications in ecological economics revisited," Ecological Economics, Elsevier, vol. 123(C), pages 68-76.
    14. Stern, Nicholas, 2015. "Why Are We Waiting? The Logic, Urgency, and Promise of Tackling Climate Change," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262029189, September.
    15. Leandri, Marc, 2009. "The shadow price of assimilative capacity in optimal flow pollution control," Ecological Economics, Elsevier, vol. 68(4), pages 1020-1031, February.
    16. Fouad Ouardighi & Hassan Benchekroun & Dieter Grass, 2014. "Controlling pollution and environmental absorption capacity," Annals of Operations Research, Springer, vol. 220(1), pages 111-133, September.
    17. Arild Angelsen & Thomas K. Rudel, 2013. "Designing and Implementing Effective REDD + Policies: A Forest Transition Approach," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 7(1), pages 91-113, January.
    18. van Soest, D.P., 1998. "Tropical Deforestation : An Economic Perspective," Other publications TiSEM 726d991c-92e0-413e-a0a5-e, Tilburg University, School of Economics and Management.
    19. Forster, B A, 1973. "Optimal Consumption Planning in a Polluted Environment," The Economic Record, The Economic Society of Australia, vol. 49(128), pages 534-545, December.
    20. Philippe Michel & Gilles Rotillon, 1995. "Disutility of pollution and endogenous growth," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(3), pages 279-300, October.
    21. M. R. Raupach & M. Gloor & J. L. Sarmiento & J. G. Canadell & T. L. Frölicher & T. Gasser & R. A. Houghton & C. Le Quéré & C. M. Trudinger, 2014. "The declining uptake rate of atmospheric CO2 by land and ocean sinks," Post-Print hal-01239783, HAL.
    Full references (including those not matched with items on IDEAS)


    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:spr:annopr:v:292:y:2020:i:1:d:10.1007_s10479-020-03638-0. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla) or (Springer Nature Abstracting and Indexing). General contact details of provider: .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.