Prevention of stock accumulation by restricting polluters’ resources
In this paper we claim that the disadvantage in the pollution control is not primarily the accumulated stock of pollutants, which is an accomplished fact, but the use of the available inputs in production in conjunction with the available equipment are the sources of pollutants accumulation. In most cases pollution is an irreversible fact and consequently, the main concern of a social planer should be the discovery of effective ways to reduce the sources (inputs and equipment) that generate pollutants. Using both optimal control and differential game approaches, we study the intertemporal strategic interactions between polluters and the social planer. We find that the establishment of cyclical strategies in a polluter’s optimal control problem requires that the polluter’s discount rate must be greater than the marginal resources’ growth. For the saddle point stability, the marginal resources growth has to be equal or less than zero. Assuming constant elasticity for the polluters’ resources reduction function and linearity for the rest of the functions, we find that the pollution game yields constant optimal Nash strategies. Finally, we provide analytical expressions of these strategies as well as the steady state value of the resources’ stock.
|Date of creation:||Apr 2011|
|Date of revision:|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Wirl Franz, 1995. "The Cyclical Exploitation of Renewable Resource Stocks May Be Optimal," Journal of Environmental Economics and Management, Elsevier, vol. 29(2), pages 252-261, September.
- Forster, Bruce A., 1980. "Optimal energy use in a polluted environment," Journal of Environmental Economics and Management, Elsevier, vol. 7(4), pages 321-333, December.
- Xepapadeas, A. P., 1992. "Environmental policy design and dynamic nonpoint-source pollution," Journal of Environmental Economics and Management, Elsevier, vol. 23(1), pages 22-39, July.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:30466. 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: (Joachim Winter)
If references are entirely missing, you can add them using this form.