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Land use dynamics and the environment

We build a model to study optimal land use, encompassing land use activities, pollution and climate change. This benchmark set-up allows us to identify the spatial drivers behind the interaction between land use and the environment. Pollution generates local and global damages since it flows across locations following a Gaussian Plume. In constrast to the previous literature on spatial dynamics, we prove that the social optimum problem is well-posed, i.e., the solution exists and is unique. We close the paper with a numerical analysis which illustrates the richness of our model, and its global dynamics. We study the different drivers of spatial heterogeneity. In particular, abatement technology stands out as a fundamental ingredient to achieve steady state solutions, which are compatible with the emergence of spatial patterns.

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Paper provided by Université Panthéon-Sorbonne (Paris 1), Centre d'Economie de la Sorbonne in its series Documents de travail du Centre d'Economie de la Sorbonne with number 12012.

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Length: 34 pages
Date of creation: Mar 2012
Date of revision:
Handle: RePEc:mse:cesdoc:12012
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  1. Klaus Desmet & Esteban Rossi-Hansberg, 2010. "On Spatial Dynamics," Journal of Regional Science, Wiley Blackwell, vol. 50(1), pages 43-63.
  2. Carmen Camacho & Raouf Boucekkine & Fabbri Giorgio, 2013. "On the optimal control of some parabolic partial differential equations arising in economics," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00973388, HAL.
  3. Raouf Boucekkine & Carmen Camacho & Zou Benteng, 2009. "Bridging the Gap between Growth Theory and the New Economic Geography: the Spatial Ramsey Model," Post-Print hal-00683809, HAL.
  4. Klaus DESMET & Esteban ROSSI-HANSBERG, 2013. "On the Spatial Economic Impact of Global Warming," Discussion papers 13057, Research Institute of Economy, Trade and Industry (RIETI).
  5. Carmen Camacho & Raouf Boucekkine & Fabbri Giorgio, 2013. "Spatial dynamics and convergence: The spatial AK model," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-00973387, HAL.
  6. Lionel Ragot & Katheline Schubert, 2006. "The optimal carbon sequestration in agricultural soils : does the dynamics of the physical process matter ?," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-00115685, HAL.
  7. Anastasios Xepapadeas & William Brock, 2009. "General Pattern Formation in Recursive Dynamical Systems Models in Economics," Working Papers 2009.49, Fondazione Eni Enrico Mattei.
  8. de Cara, Stephane & Rozakis, Stelios, 2004. "Carbon sequestration through the planting of multi-annual energy crops: A dynamic and spatial assessment," Agricultural Economics Review, Greek Association of Agricultural Economists, vol. 5(1), January.
  9. Desmet, Klaus & Rossi-Hansberg, Esteban, 2007. "Spatial Growth and Industry Age," CEPR Discussion Papers 6421, C.E.P.R. Discussion Papers.
  10. Weitzman, Martin L., 2002. "Landing Fees vs Harvest Quotas with Uncertain Fish Stocks," Journal of Environmental Economics and Management, Elsevier, vol. 43(2), pages 325-338, March.
  11. Havlík, Petr & Schneider, Uwe A. & Schmid, Erwin & Böttcher, Hannes & Fritz, Steffen & Skalský, Rastislav & Aoki, Kentaro & Cara, Stéphane De & Kindermann, Georg & Kraxner, Florian & Leduc, Sylvain & , 2011. "Global land-use implications of first and second generation biofuel targets," Energy Policy, Elsevier, vol. 39(10), pages 5690-5702, October.
  12. Steven C. Salop, 1979. "Monopolistic Competition with Outside Goods," Bell Journal of Economics, The RAND Corporation, vol. 10(1), pages 141-156, Spring.
  13. Andrew J. Plantinga, 1996. "The Effect of Agricultural Policies on Land Use and Environmental Quality," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 78(4), pages 1082-1091.
  14. Eithan Hochman & David Pines & David Zilberman, 1977. "The Effects of Pollution Taxation on the Pattern of Resource Allocation: The Downstream Diffusion Case," The Quarterly Journal of Economics, Oxford University Press, vol. 91(4), pages 625-638.
  15. Klaus Desmet & Ejaz Ghani & Stephen O'Connell & Esteban Rossi-Hansberg, 2015. "The Spatial Development Of India," Journal of Regional Science, Wiley Blackwell, vol. 55(1), pages 10-30, 01.
  16. Brock, William & Xepapadeas, Anastasios, 2008. "Pattern Formation, Spatial Externalities and Regulation in Coupled Economic-Ecological Systems," MPRA Paper 9105, University Library of Munich, Germany.
  17. Luca Marchiori & Ingmar Schumacher, 2011. "When nature rebels: international migration, climate change, and inequality," Journal of Population Economics, Springer, vol. 24(2), pages 569-600, April.
  18. Hochman, Oded & Ofek, Haim, 1979. "A theory of the behavior of municipal governments: The case of internalizing pollution externalities," Journal of Urban Economics, Elsevier, vol. 6(4), pages 416-431, October.
  19. Tietenberg, Thomas H, 1974. "On Taxation and the Control of Externalities: Comment," American Economic Review, American Economic Association, vol. 64(3), pages 462-66, June.
  20. Carmen Camacho & Zou Benteng & Maya Briani, 2008. "On the dynamics of capital accumulation across space," Post-Print hal-00683807, HAL.
  21. Xepapadeas, Anastasios, 2010. "The spatial dimension in environmental and resource economics," Environment and Development Economics, Cambridge University Press, vol. 15(06), pages 747-758, December.
  22. Martin L. Weitzman, 2009. "On Modeling and Interpreting the Economics of Catastrophic Climate Change," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 1-19, February.
  23. Costello, Christopher & Polasky, Stephen, 2008. "Optimal harvesting of stochastic spatial resources," Journal of Environmental Economics and Management, Elsevier, vol. 56(1), pages 1-18, July.
  24. Nordhaus, William D, 1977. "Economic Growth and Climate: The Carbon Dioxide Problem," American Economic Review, American Economic Association, vol. 67(1), pages 341-46, February.
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  26. repec:inr:wpaper:11526 is not listed on IDEAS
  27. Stéphane Cara & Martin Houzé & Pierre-Alain Jayet, 2005. "Methane and Nitrous Oxide Emissions from Agriculture in the EU: A Spatial Assessment of Sources and Abatement Costs," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 32(4), pages 551-583, December.
  28. Brock, William & Xepapadeas, Anastasios, 2008. "Diffusion-induced instability and pattern formation in infinite horizon recursive optimal control," Journal of Economic Dynamics and Control, Elsevier, vol. 32(9), pages 2745-2787, September.
  29. repec:hal:wpaper:halshs-00831042 is not listed on IDEAS
  30. Olivier Desch�nes & Michael Greenstone, 2007. "The Economic Impacts of Climate Change: Evidence from Agricultural Output and Random Fluctuations in Weather," American Economic Review, American Economic Association, vol. 97(1), pages 354-385, March.
  31. Smith, Martin D. & Sanchirico, James N. & Wilen, James E., 2009. "The economics of spatial-dynamic processes: Applications to renewable resources," Journal of Environmental Economics and Management, Elsevier, vol. 57(1), pages 104-121, January.
  32. Papageorgiou, Yorgo Y & Smith, Terrence R, 1983. "Agglomeration as Local Instability of Spatially Uniform Steady-States," Econometrica, Econometric Society, vol. 51(4), pages 1109-19, July.
  33. Paulo Brito, 2004. "The Dynamics of Growth and Distribution in a Spatially Heterogeneous World," Working Papers Department of Economics 2004/14, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  34. Desmet, Klaus & Ghani, Ejaz & O'Connell, Stephen, 2013. "India’s Spatial Development," World Bank - Economic Premise, The World Bank, issue 124, pages 1-5, September.
  35. Chakir, Raja & Le Gallo, Julie, 2013. "Predicting land use allocation in France: A spatial panel data analysis," Ecological Economics, Elsevier, vol. 92(C), pages 114-125.
  36. Gilles Duranton, 2007. "Urban Evolutions: The Fast, the Slow, and the Still," American Economic Review, American Economic Association, vol. 97(1), pages 197-221, March.
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