Can harmful events be another source of environmental traps?

Can Askan Mavi

Journal of Mathematical Economics, 2020, vol. 89, issue C, 29-46

Abstract: This paper aims to present a new explanation for environmental traps through the presence of endogenous hazard rate. We show that adaptation and mitigation policies affect the occurrence of environmental traps differently. The former could cause environmental traps, whereas the latter could help society avoid such traps by decreasing the probability of a harmful event occurring. As a result, we present a new trade-off between adaptation and mitigation policies different than the usual dynamic trade-off that is highlighted in many studies and is crucial to developing countries. Contrary to the literature, when an economy is in a trap, an economy with a high environmental quality equilibrium tends to be more conservative in terms of resource exploitation than an economy with a low environmental quality equilibrium, which implies a heterogeneous reaction against the endogenous hazard rate.

Keywords: Harmful event; Occurrence hazard; Tipping points; Multiple equilibria; Adaptation; Mitigation (search for similar items in EconPapers)
Date: 2020
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0304406820300483
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:mateco:v:89:y:2020:i:c:p:29-46

DOI: 10.1016/j.jmateco.2020.04.005

Access Statistics for this article

Journal of Mathematical Economics is currently edited by Atsushi (A.) Kajii

More articles in Journal of Mathematical Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().