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Assessing the sustainability of optimal pollution paths in a world with inertia

Author

Listed:
  • Marc Leandri

    () (UniversitŽ de Versailles Saint Quentin Ð CEMOTEV)

  • Mabel Tidball

    () (INRA-LAMETA)

Abstract

Most formal optimal pollution control models assume a constant natural assimilative capacity, despite the biophysical evidence on feedback effects that can degrade this environmental function, as it is the case with the reduction of ocean carbon sinks in the context of climate change. The few models that do consider this degradation establish a bijective relation between the pollution stock and the assimilative capacity, thus ignoring the inertia mechanism at stake. Indeed the level of assimilative capacity is not solely determined by the current pollution stock but by the history of this stock and by the time the ecosystem remains above the degradation threshold. We propose an inertia assessment tool that tests the sustainability of any benchmark optimal pollution path when the inertia of the assimilative capacity degradation process is taken into account. Our simulations show a strong sensitivity to both the inertia degradation speed and the discount rate.

Suggested Citation

  • 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.
  • Handle: RePEc:fae:wpaper:2017.10
    as

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    File URL: http://faere.fr/pub/WorkingPapers/L%C3%A9andri_Tidball_FAERE_WP2017.10.pdf
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    References listed on IDEAS

    as
    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.
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    More about this item

    Keywords

    Optimal pollution control; Climate Change; Ecosystem Services; Assimilative Capacity; Inertia;

    JEL classification:

    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q01 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - Sustainable Development
    • Q5 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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