Modeling of environmental adaptation versus pollution mitigation

Yuri Yatsenko, Natali Hritonenko and Thierry Bréchet
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Natali Hritonenko: Department of Mathematics, Prairie View A&M University

No 2014006, LIDAM Discussion Papers CORE from Université catholique de Louvain, Center for Operations Research and Econometrics (CORE)

Abstract: The paper combines analytic and numeric tools to investigate a nonlinear optimal control problem relevant to the economics of climate change. The problem describes optimal investments into pollution mitigation and environmental adaptation at a macroeconomic level. The steady-state analysis of this problem focuses on the optimal ratio between adaptation and mitigation. In particular, we analytically prove that the long- term investments into adaptation are profitable only for economies above certain efficiency threshold. Numerical simulation is provided to estimate how the economic efficiency and capital deterioration affect the optimal policy.

Keywords: climate change; environmental adaptation; mitigation; optimal control; steady state analysis (search for similar items in EconPapers)
JEL-codes: J22 R20 (search for similar items in EconPapers)
Date: 2014-03-12
New Economics Papers: this item is included in nep-agr, nep-cmp, nep-ene, nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:cor:louvco:2014006

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