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Pollution, unequal lifetimes and fairness

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  • Grégory Ponthière

    (PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, ERUDITE - Equipe de Recherche sur l’Utilisation des Données Individuelles en lien avec la Théorie Economique - UPEM - Université Paris-Est Marne-la-Vallée - UPEC UP12 - Université Paris-Est Créteil Val-de-Marne - Paris 12)

Abstract

This paper characterizes the optimal level of pollution in a two-period OLG economy where pollution deteriorates survival conditions. We compare two long-run social optima: on the one hand, the average utilitarian optimum, where the long-run average well-being is maximized, and, on the other hand, the ex post egalitarian optimum, where the realized well-being of the worst-off at the stationary equilibrium is maximized. It is shown that the ex post egalitarian optimum involves, under weak conditions, a higher level of pollution in comparison with the utilitarian optimum. This result is robust to introducing health expenditures in the survival function. Finally, we examine the decentralization of those two social optima, and we compare the associated optimal taxes on capital income aimed at internalizing the pollution externality.

Suggested Citation

  • Grégory Ponthière, 2016. "Pollution, unequal lifetimes and fairness," Post-Print halshs-01509676, HAL.
  • Handle: RePEc:hal:journl:halshs-01509676
    DOI: 10.1016/j.mathsocsci.2016.04.004
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    Cited by:

    1. Brembilla, Laurent, 2018. "Longevity and welfare in general equilibrium," Mathematical Social Sciences, Elsevier, vol. 93(C), pages 22-36.
    2. Dugan, Anna & Prskawetz, Alexia & Raffin, Natacha, 2022. "The Environment, Life Expectancy and Growth in Overlapping Generations Models: A Survey," ECON WPS - Working Papers in Economic Theory and Policy 01/2022, TU Wien, Institute of Statistics and Mathematical Methods in Economics, Economics Research Unit.
    3. Johanna Etner & Natacha Raffin & Thomas Seegmuller, 2018. "Male Reproductive Health, Fairness and Optimal Policies," Working Papers halshs-01798983, HAL.
    4. Eisei Ohtaki, 2023. "Climate change, financial intermediation, and monetary policy," Working Papers e179, Tokyo Center for Economic Research.
    5. Pietro F. Peretto & Simone Valente, 2021. "Growth with Deadly Spillovers," University of East Anglia School of Economics Working Paper Series 2021-05, School of Economics, University of East Anglia, Norwich, UK..
    6. Cui, Xiaodong & Chang, Ching-Ter, 2020. "How life expectancy affects welfare in a Diamond-type overlapping generations model," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 555(C).

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