Accumulative pollution, "clean technology," and policy design

M.A. Toman, C.A.A.M. Withagen

Onderzoeksoutput: Bijdrage aan tijdschriftTijdschriftartikelAcademicpeer review

23 Citaten (Scopus)


This paper addresses the optimal long-term management of an accumulative but assimilable pollutant through economic incentive policies that restrict more damaging production processes and induce more benign alternatives. Using a simple general equilibrium approach, we consider the possibility that the assimilative capacity of the environment is eventually exhausted by pollution accumulation. In this case, there is a nonconvexity in the problem that gives rise to multiple potential optima; environmental quality may be preserved or completely degraded in the long term. We characterize the circumstances under which phasing out dirty production is consistent with an intertemporally optimizing path and we discuss the design of price-based and quantity-based policies for supporting an optimal solution with the nonconvexity.
Originele taal-2Engels
Pagina's (van-tot)367-384
Aantal pagina's18
TijdschriftResource and Energy Economics
Nummer van het tijdschrift4
StatusGepubliceerd - 2000

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