The shadow price of assimilative capacity in optimal flow pollution control

Marc Leandri

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Abstract: We present a model of optimal flow pollution control considering explicitly the dynamics of the corresponding assimilative capacity. We focus first on the degradation of this assimilative capacity triggered by pollution excesses and determine the intertemporal efficient pollution path, taking into account this ecological feedback. Our analysis shows that a minimum level of initial assimilative capacity is necessary to prevent its optimal extinction. We then allow for the restoration of assimilative capacity and characterize the conditions under which this option frees the optimal policy from the dependency on the initial conditions. In both cases our results call for environmental standards based on the shadow price of assimilative capacity that are stricter than the static optimum commonly used in flow pollution control.

Keywords: Pollution control; Assimilative capacity; Ecosystem services (search for similar items in EconPapers)
Date: 2009
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Citations: View citations in EconPapers (9)

Published in Ecological Economics, 2009, 68 (4), pp.1020-1031. ⟨10.1016/j.ecolecon.2008.11.019⟩

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Journal Article: The shadow price of assimilative capacity in optimal flow pollution control (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00394092

DOI: 10.1016/j.ecolecon.2008.11.019

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