Pollution Control in an Uncertain Environment

Yacov Tsur and Amos Zemel

No 232687, Working Papers from Hebrew University of Jerusalem, Center for Agricultural Economic Research

Abstract: The effects of the threat of occurrence of environmental catastrophes on optimal pollution control is considered. Recent analysis of irreversible events is extended to two types of reversible events: single-occurrence and multiple-occurrence (recurrent) events. While it is possible that the threat of irreversible events induces more pollution, we show that reversible events, under quite general conditions, induce more conservation (less pollution). The analysis is carried out via a simple method (the "ho-method") to identify optimal steady states by comparing steady state policies with small variations from them. For recurrent events the optimal state process must approach a unique steady state from any initial level. In this case, the ho-method characterizes the dynamic behavior of the optimal state process without actually solving for it.

Keywords: Environmental; Economics; and; Policy (search for similar items in EconPapers)
Pages: 27
Date: 1996
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Citations: View citations in EconPapers (4)

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Related works:
Journal Article: Pollution control in an uncertain environment (1998)
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Persistent link: https://EconPapers.repec.org/RePEc:ags:huaewp:232687

DOI: 10.22004/ag.econ.232687

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