Optimal dynamic scale and structure of a multi-pollution economy
- We analyze the optimal dynamic scale and structure of a two-sectoreconomy, where each sector produces one consumption good and one specific pollutant. Both pollutants accumulate at di_erent rates to stocks which damage the natural environment. This acts as a dynamic driving force for the economy. Our analysis shows that along the optimal time-path (i) the overall scale of economic activity may be less than maximal; (ii) the time scale of economic dynamics (change of scale and structure) is mainly determined by the lifetime of pollutants, their harmfulness and the discount rate; and (iii) the optimal control of economic scale and structure may be non-monotonic. These results raise important questions about the optimal design of environmental policies.
Author: | Stefan BaumgärtnerORCiDGND, Frank Jöst, Ralph Winkler |
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URL: | https://pub-data.leuphana.de/frontdoor/index/index/docId/508 |
Document Type: | ResearchPaper |
Language: | English |
Year of Completion: | 2007 |
Date of Publication (online): | 2007/08/20 |
Release Date: | 2007/08/20 |
Tag: | dynamic economy-environment interaction; multi-pollutant emissions; non-monotonic control; optimal scale; stock pollution |
GND Keyword: | Ökonomie <Begriff>; Ökologie; Emission; Wertpapieremission |
Institutes: | Universität / Frühere Fachbereiche |
Dewey Decimal Classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |