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Optimal Regulation Of Eutrophying Lakes, Fjords And Rivers In The Presence Of Threshold Effects

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  • Naevdal, Eric

Abstract

In a large number of practical environmental regulation problems, the damage done by pollutants depends on stocks and/or flows of pollutants exceeding certain thresholds. A typical example is eutrophication which occur when stocks of nutrients in a lake exceeds a certain threshold. The present paper presents a model of eutrophication that accounts for such thresholds. The paper does so by applying a novel technique in optimal control theory that allows for the analysis of systems where state-variables bounce back and forth over thresholds that take the form of functions of time and state-variables.

Suggested Citation

  • Naevdal, Eric, 1999. "Optimal Regulation Of Eutrophying Lakes, Fjords And Rivers In The Presence Of Threshold Effects," 1999 Annual meeting, August 8-11, Nashville, TN 21619, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    • Handle: RePEc:ags:aaea99:21619
    DOI: 10.22004/ag.econ.21619
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    File URL: http://ageconsearch.umn.edu/record/21619/files/sp99na01.pdf
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    References listed on IDEAS

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    1. Charles Perrings & David Pearce, 1994. "Threshold effects and incentives for the conservation of biodiversity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(1), pages 13-28, February.
    2. Farzin, Y. H., 1996. "Optimal pricing of environmental and natural resource use with stock externalities," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 31-57, October.
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    Cited by:

    1. Marita Laukkanen & Anni Huhtala, 2008. "Optimal management of a eutrophied coastal ecosystem: balancing agricultural and municipal abatement measures," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 39(2), pages 139-159, February.
    2. Naevdal, Eric, 2006. "Dynamic optimisation in the presence of threshold effects when the location of the threshold is uncertain - with an application to a possible disintegration of the Western Antarctic Ice Sheet," Journal of Economic Dynamics and Control, Elsevier, vol. 30(7), pages 1131-1158, July.
    3. Gren, Ing-Marie, 2009. "A numerical model for dynamic cost effective mitigation of eutrophication with spatial heterogeneity in the Baltic Sea," Department of Economics publications 4311, Swedish University of Agricultural Sciences, Department of Economics.
    4. Katarina Elofsson, 2007. "Cost Uncertainty and Unilateral Abatement," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 36(2), pages 143-162, February.
    5. Laukkanen, Marita & Huhtala, Anni, 2005. "Optimal Control of Nutrient Pollution in a Coastal Ecosystem: Agricultural Abatement versus Investment in Wastewater Treatment Capacity," 2005 International Congress, August 23-27, 2005, Copenhagen, Denmark 24451, European Association of Agricultural Economists.
    6. Polasky, Stephen & de Zeeuw, Aart & Wagener, Florian, 2011. "Optimal management with potential regime shifts," Journal of Environmental Economics and Management, Elsevier, vol. 62(2), pages 229-240, September.
    7. Elofsson, Katarina & Folmer, Henk & Gren, Ing-Marie, 2003. "Management of eutrophicated coastal ecosystems: a synopsis of the literature with emphasis on theory and methodology," Ecological Economics, Elsevier, vol. 47(1), pages 1-11, November.
    8. Brozovic, Nicholas & Schlenker, Wolfram, 2011. "Optimal management of an ecosystem with an unknown threshold," Ecological Economics, Elsevier, vol. 70(4), pages 627-640, February.
    9. Sergey Rabotyagov & Catherine L. Kling & Philip W. Gassman & Nancy N. Rabalais & R. Eugene Turner, 2012. "Economics of Dead Zones: Linking Externalities from the Land to their Consequences in the Sea, The," Center for Agricultural and Rural Development (CARD) Publications 12-wp534, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    10. Michael Margolis & Eric Nævdal, 2008. "Safe Minimum Standards in Dynamic Resource Problems: Conditions for Living on the Edge of Risk," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(3), pages 401-423, July.
    11. Crépin, Anne-Sophie & Norberg, Jon & Mäler, Karl-Göran, 2011. "Coupled economic-ecological systems with slow and fast dynamics -- Modelling and analysis method," Ecological Economics, Elsevier, vol. 70(8), pages 1448-1458, June.
    12. Nuppenau, Ernst-August, 2008. "On The Inclusion Of Nature And Its Dynamics In Farmers' Objective Functions For Eco-System Services Provision: A New Strategy In Bio-Economic Modeling," 107th Seminar, January 30-February 1, 2008, Sevilla, Spain 6653, European Association of Agricultural Economists.
    13. Elofsson, Katarina, 2002. "Economics of Marine Pollution," Department of Economics publications 78, Swedish University of Agricultural Sciences, Department of Economics.
    14. Hein, Lars, 2006. "Cost-efficient eutrophication control in a shallow lake ecosystem subject to two steady states," Ecological Economics, Elsevier, vol. 59(4), pages 429-439, October.
    15. Anne Sophie Crépin, 2003. "Threshold Effects in Coral Reef Fisheries," Working Papers 2003.107, Fondazione Eni Enrico Mattei.

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