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(In)Efficient Management of Interacting Environmental Bads AgEcon
Kuosmanen, Timo; Laukkanen, Marita.
Many environmental problems involve the transformation of multiple harmful substances into one or more damage agents much in the same way as a firm transforms inputs into outputs. Yet environmental management differs from a firm’s production in one important respect: while a firm seeks efficient input allocation to maximize profit, an environmental planner allocates abatement efforts to render the production of damage agents as inefficient as possible. We characterize a solution to the hmultiple pollutants problem and show that the optimal policy is often a corner solution, in which abatement is focused on a single pollutant. Corner solutions may arise even in well-behaved problems with concave production functions and convex damage and cost functions....
Tipo: Working or Discussion Paper Palavras-chave: Climate change; Cost-benefit analysis; Eutrophication; Multiple pollutants; Optimal environmental policy; Pollution control; Environmental Economics and Policy.
Ano: 2009 URL: http://purl.umn.edu/54287
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