Controlling Pollution and Environmental Absorption Capacity

Fouad Ouardighi (), Hassan Benchekroun and Dieter Grass
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Fouad Ouardighi: ESSEC Business School
Hassan Benchekroun: McGill University
Dieter Grass: Vienna University of Technology

Chapter Chapter 1 in Essays on Pollution Control in Economics and Management Science, 2025, pp 3-29 from Springer

Abstract: Abstract This pollution accumulation model shows that the environmental absorption capacity is impacted by economic activity. The resulting optimal control problem has two interrelated state variables: the stock of pollution and the absorption capacity of the environment. The stock of pollution decreases with environmental absorption capacity and increases with the rate of current emissions, which is controlled by a production level as well as an emissions reduction effort. However, the environmental absorption capacity is positively affected by an absorption development effort, and negatively impacted by the stock of pollution. Under specific conditions, it is shown that an optimal path, which can be either monotonic or following transient oscillations, leads to a (nontrivial) saddle point characterized by a positive environmental absorption capacity.

Keywords: Pollution; Environmental absorption capacity; Production rate; Emissions reduction effort; Absorption development effort (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/978-3-031-78227-5_1

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