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Managing spatial linkages and geographic heterogeneity in dynamic models with transboundary pollution

Raouf Boucekkine (), Giorgio Fabbri (), Salvatore Federico and Fausto Gozzi
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Salvatore Federico: UniGe - Università degli studi di Genova = University of Genoa

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Abstract: We construct a spatiotemporal frame for the study of spatial economic and ecological patterns generated by transboundary pollution. Space is continuous and polluting emissions originate in the intensity of use of the production input. Pollution flows across locations following a diffusion process. The objective functional of the economy is to set the optimal production policy over time and space to maximize welfare from consumption, taking into account a negative local pollution externality and the diffusive nature of pollution. Our framework allows for space and time dependent preferences and productivity, and does not restrict diffusion speed to be space-independent. Accordingly, we develop a methodology to investigate the environmental and economic implications of spatiotemporal heterogeneity. We propose a method for an analytical characterization of the optimal paths. An application to technological spillovers is proposed for illustration. We focus on the determination of the optimal short-term spatiotemporal dynamics induced by the resulting non-autonomous problems.

Keywords: Transboundary pollution; Spatiotemporal modeling; Geographic heterogeneity; Infinite dimensional optimal control; Optimal spatiotemporal short-term dynamics (search for similar items in EconPapers)
Date: 2022-02-25
New Economics Papers: this item is included in nep-ene, nep-env, nep-res and nep-ure
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Published in Journal of Mathematical Economics, 2022, 98, ⟨10.1016/j.jmateco.2021.102577⟩

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DOI: 10.1016/j.jmateco.2021.102577

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