Pollution Stock Research Articles

Cleaner Technologies and the Stability of International Environmental Agreements

Abstract: This paper shows that, if countries are farsighted when deciding whether to defect from a coalition, then the implementation of cleaner technologies may jeopardize the chances of reaching an international environmental agreement. The grand coalition may be destabilized by the implementation of cleaner technologies, ultimately resulting in higher global emissions and lower global welfare. We further show that the higher the stock of pollution at the instant when the cleaner technology is implemented, the more likely that the above mechanism unfolds. We examine a reduction in the emission per output ratio as well as measures that enhance the natural rate of decay of stock pollutants.

Prices vs Quantities for Multiple Stock Pollutants with an Application to Global Warming

This paper investigates the price vs quantity choice (taxes vs quotas) for multiple stock pollutants that can accumulate over time and interact mutually into abatement costs or environmental damages, when firms have private information. The analytic condition for favoring quotas over taxes was obtained for a case of symmetric pollutants and numerical simulations were conducted for the more general case. Moreover, an empirical application to global warming suggests that it is optimal for the regulator to choose a mixed policy that implements taxes on CO2 and quotas on methane.

Pollution diffusion and abatement activities across space and over time

We analyze the spatio-temporal dynamics of capital and pollution in an economic growth model with purposive environmental protection activities. The production process of a unique homogeneous good generates pollution, thus the increases in output associated with economic growth tend to rise the stock of pollution. Pollution is a negative production externality which thus feeds back on the economy lowering the level of output; in order to compensate for such a negative effect associated with economic development, pollution is reduced by publicly funded abatement activities. We firstly consider a Solow-type framework in which economic and environmental policies are completely exogenous, and then we move to a Ramsey-type context in which they are endogenously determined. We analyze the spatio-temporal dynamics of the model economy through numerical simulations, and we consider two different specifications of the production function (a globally concave and a convex–concave technology) in order to stress the role that eventual poverty traps might play on both economic and environmental outcomes. We show that in the convex–concave technology framework, whenever rich regions are substantially rich diffusion can help poor regions to escape their poverty traps; if however they are not rich enough diffusion might condemn also rich regions to collapse. However, even if rich regions are particularly rich whenever the pollution externality is strong, the whole spatial economy might be doomed to collapse.

Evidencing the Impact of Coastal Contaminated Sediments on Mussels Through Pb Stable Isotopes Composition.

Heavily contaminated sediments are a serious concern for ecosystem quality, especially in coastal areas, where vulnerability is high due to intense anthropogenic pressure. Surface sediments (54 stations), 50 cm interface cores (five specific stations), river particles, coal and bulk Pb plate from past French Navy activities, seawater and mussels were collected in Toulon Bay (NW Mediterranean Sea). Lead content and Pb stable isotope composition have evidenced the direct impact of sediment pollution stock on both the water column quality and the living organisms, through the specific Pb isotopic signature in these considered compartments. The history of pollution events including past and present contaminant dispersion in Toulon Bay were also demonstrated by historical records of Pb content and Pb isotope ratios in sediment profiles. The sediment resuspension events, as simulated by batch experiments, could be a major factor contributing to the high Pb mobility in the considered ecosystem. A survey of Pb concentrations in surface seawater at 40 stations has revealed poor seawater quality, affecting both the dissolved fraction and suspended particles and points to marina/harbors as additional diffuse sources of dissolved Pb.

International Environmental Agreements under Endogenous Uncertainty

AbstractThis paper explores the implications of the possibility of a shift in environmental damages on the participation in environmental treaties. Using a two‐period model where the probability of a regime shift increases in the first‐period pollution stock, we examine the issue of coalition formation under both fixed and dynamic membership. Our analysis suggests that endogenous uncertainty may increase participation. We find that full cooperation may be sustained, but only in the presence of endogenous uncertainty. Interestingly, when the shift in the environmental damage is large enough, the model provides a way to solve the “puzzle of small coalitions” found in the literature related to international environmental agreements. We also find that in period 1 (period 2) endogenous uncertainty leads to a lower (higher) pollution stock under dynamic membership as compared to the fixed membership case.

Models-as-usual for unusual risks? On the value of catastrophic climate change

We study the role of intertemporal preference representations in a model of economic growth, stock pollutant and endogenous risk of catastrophic collapse. We contrast two polar instances of risk-sensitive preferences: the traditional “discounted utility” model, which imposes a positive rate of pure time preference and risk neutrality with respect to intertemporal utility, and multiplicatively separable preferences, which display risk aversion in that dimension but no pure time preferences. We show that both representations of preferences can rationalize the same economy when there is no collapse risk associated with pollution. Once we introduce a collapse risk whose hazard rate depends on the pollution stock, multiplicatively separable preferences are associated with a much higher value of catastrophic risk reduction, and a more stringent policy response. A relatively high discount rate may thus be compatible with large emissions abatement in the face of a low probability large impact event, reflecting preferences for catastrophic risk reduction.

The effects of R&D investments in international environmental agreements with asymmetric countries

The paper examines the stability of international environmental agreements (IEAs) in a dynamic context where abatement levels are associated with the stock pollutant evolution. We underline two meaningful aspects of this matter. Firstly, we consider asymmetry among countries, dividing them in two types: developed countries that have a considerable environmental awareness and developing ones that pay a less attention to environmental preservation. Secondly, we introduce a positive externality in the cooperation where countries coordinate their R&D activities sharing the investments in order to avoid duplication of green activities. Otherwise, the non-cooperators support completely their R&D investments for clean technologies. These two aspects encourage the formation of stable coalitions till to determine conditions for which also the grand coalition is stable.

Impacts of government and market on firm’s efforts to reduce pollution

AbstractWe examine how the government and the market affect firm’s pollution abatement efforts, i.e. firm’s efforts to reduce its pollution emission. The way for the government to control firm’s pollution is to impose penalty, whereas the consumers (the market) make their purchasing decision by taking into account the pollution, i.e. the demand is affected by the stock of pollution. In effect, we consider two forces, government penalty and consumer’s sensitivity to pollution, as primary factors to control firm’s pollution and analyze their interaction in relation to the firm’s pollution reduction efforts. The analysis suggests as follows. The government penalty and the consumer’s awareness are substitutes either (1) when the market size is relatively large or (2) when the market is relatively small, but the government penalty is relatively heavy. On the contrary, the two factors are complements when the market size is relatively small and the government penalty is relatively light. We discuss managerial a...

Tourism sustainability in Tibet – Forward planning using a systems approach

The purpose of this study is to employ a nonlinear dynamic evaluation method to assess the tourism sustainability of Tibet Autonomous Region (TAR), China, a new emerging tourism destination. The methodology draws on system dynamics and Back Propagation (BP) neural network. According to 7 setting principles, this study identifies 13 tourism sustainability indicators including conventional tourism income, tourism resources stock, pollution stock, etc., as well as specific residents’ tourism cognition, seasonal difference, accessibility, etc. Then a system dynamics model including the 13 indicators (variables) and other relevant auxiliary variables is established. Based on the numerical simulation, using a three layers BP neural network optimized by genetic algorithm and particle swarm algorithm, this study evaluates the future sustainability dynamically and compares the sustainability evolution from 2014 to 2050 under different development strategies. The research results not only provide information useful for the dynamic control and scientific management of the future sustainable tourism development, but also provide a systems approach to evaluate regional tourism sustainability.

Transboundary pollution game with potential shift in damages

Complex systems exposed to pollution may suddenly and permanently shift to a dangerous regime. This paper studies a dynamic game among countries that face the prospect of such a shift. Each country derives some flow utility from its own emissions, which are chosen unilaterally. But flow emissions by all countries increase the pollution stock in the world. In addition to generating global damages such as global warming, the pollution stock may trigger an irreversible and abrupt jump in global damages or catastrophe at an unknown date in the future. We ask whether endogenous and exogenous threats of such a jump in damages or catastrophe mitigate the tragedy of the commons and examine their implications on welfare. Our analysis yields different emission responses to these threats as compared to the related literature that focuses only on the single-polluter case. For example, when the hazard rate is exogenous and countries commit to nonlinear strategies, we find that the threat of a possible jump in damages or catastrophe may induce a lower or larger emission level and initial welfare due to multiple equilibria. These results are maintained when the hazard rate endogenously depends on emission decisions.

Regulation of relationships between heterogeneous farmers and an aquifer accounting for lag effects

Many environmental problems are due to damage caused by pollutants that accumulate with a time lag following their emission. In this study, we focus on nitrates used in agriculture, which can pollute groundwater many years after their initial application. A dynamic optimal control problem with heterogeneous farmers is proposed. The usual structural parameters such as the discount rate, the natural clearing rate and the lagged time interval between the occurrence of soil‐level pollution and the impact on groundwater are taken into account. We also examine pollution as caused by a continuous set of farms characterised by their individual performance index and by their individual marginal contribution to the pollution. The issue is further investigated by taking account of change in the information context, successively related to perfect information and to asymmetric information. As a result, when the delay between the spreading of N‐fertilizer and the impact on the aquifer increases, that is, the longer the lag, the steady‐state pollution stock and the steady‐state shadow price of the stock both increase. Moreover, we show that the optimal regulation may require a decreasing amount of fertilizer over time, even in the case of initial underpollution.

On foreign aid, pollution and abatement

AbstractThis paper provides a Ricardian general equilibrium model to study the effect of foreign aid aimed at abating pollution in a small southern recipient economy. The government faces a dynamic problem as it chooses the emission level and abates pollution. The stock of pollution damages consumers and its law of motion is influenced by emission level and the stock of pollution as well as the level of abatement. We show that such type of aid increases emissions, but its effect on pollution stock is ambiguous in the absence of trade. With trade, aid reduces both pollution and emissions given that the recipient country has comparative advantage in the pollution-intensive good. Moreover, such type of aid can be immiserizing with or without trade.

Adaptation for Mitigation

This paper develops a dynamic model consisting of two regions (North and South), in which the accumulation of human capital is negatively influenced by the global stock of pollution. By characterizing the equilibrium strategy of each region, we show that the regions' best responses can be strategic complements through a dynamic complementarity effect. The model is used to analyze the impact of adaptation assistance from North to South. It is shown that North's unilateral assistance to South (thus enhancing South's adaptation capacity) can facilitate pollution mitigation in both regions, especially when the assistance is targeted at human capital protection.

Endogenous Growth with a Ceiling on the Stock of Pollution

The effects of an agreement such as the Kyoto Protocol, which implicitly imposes a ceiling on the stock of pollution, have recently been studied in Hotelling models. We add pollution and a ceiling to the endogenous growth model of Tsur and Zemel (J Environ Econ Manag 49(3):484–499, 2005) to study the effects of the ceiling (and pollution) on capital and research investments. In the short run, the ceiling adds an additional scarcity to the one induced by the limited fossil fuel stock. Ceteris paribus, the extraction rate of cheap fossil fuel is reduced and backstop utilization boosted. This increases energy costs (energy cost effect) and makes R&D more beneficial compared with capital accumulation (research effect). R&D investments may increase, depending on capital endowment and the strength of the two effects. The sum of R&D and capital investments is affected, as both effects change disposable production. In the long-run, i.e. after the exhaustion of limited resources, the shape of the evolution path can be only affected by the ceiling, if the capital endowment is sufficiently large.

Optimal pollution control with distributed delays

We present a model of optimal stock pollution control with general distributed delays in the stock accumulation dynamics. Using generic functional forms and a distribution structure covering a wide range of distributions, we solve analytically the complex dynamic system that arises from the introduction of these distributed delays. From a theoretical standpoint, our contribution extends the dynamic optimization literature that focused on single discrete delays and develops an original method to address control problems written as mixed type functional differential equations with general kernels. Our results show the qualitative impact of acknowledging these distributed delays on the optimal pollution paths dynamics. We study analytically the properties of the dynamics and we identify the conditions for the occurrence of limit cycles. This theoretical work contributes to the design of efficient environmental policies in the presence of complex delays.

Socio-economic analysis for the authorisation of chemicals under REACH: A case of very high concern?

Under the European chemicals’ legislation, REACH, substances that are identified to be of “very high concern” will de facto be removed from the market unless the European Commission grants authorisations permitting specific uses. Companies who apply for an authorisation without demonstrating “adequate control” of the risks have to show by means of a socio-economic analysis (SEA) that positive impacts of use outweigh negative impacts for human health and ecosystems. This paper identifies core challenges where further in-depth guidance is urgently required in order to ensure that a SEA can deliver meaningful results and that it can effectively support decision-making on authorisation. In particular, we emphasise the need (i) to better guide the selection of tools for impact assessment, (ii) to explicitly account for stock pollution effects in impact assessments for persistent and very persistent chemicals, (iii) to define suitable impact indicators for PBT/vPvB chemicals given the lack of reliable information about safe concentration levels, (iv) to guide how impacts can be transformed into values for decision-making, and (v) to provide a well-balanced discussion of discounting of long-term impacts of chemicals.

Growth and Mitigation Policies With Uncertain Climate Damage

We analyze an endogenously growing economy in which production generates greenhouse gas emissions leading to global temperature increase. Global warming causes stochastic climate shocks, modeled by the Poisson process, which destroy part of the economy's capital stock. Part of the output may be devoted to emissions abatement and thus damages from climate shocks may be reduced. We solve the model in closed form and show that the optimal path is characterized by a constant growth rate of consumption and capital stock until a shock arrives, triggering a downward jump in both variables. The magnitude of the jump depends on the Poisson arrival rate, abatement efficiency, damage intensity, and the elasticity of intertemporal consumption substitution. Optimum mitigation policy consists of spending a constant share of output on abatement, which is an increasing function of the Poisson arrival rate, the economy's productivity, polluting intensity of output, and the intensity of environmental damage. Optimum growth and abatement react sharply to changes in the arrival rate and the damage intensity, suggesting more stringent climate policies for a realistic world with uncertainty compared to the certainty-equivalent case. We extend the baseline model by adding climate-induced fluctuations around the growth trend and stock pollution effects, showing the robustness of our results.

Nonlinear dynamic pollution under uncertainty and binding targets

In this paper, we study the effects of environmental regulation which establishes binding targets to pollution accumulation. Pollution follows a geometric Brownian motion. Inside the targets, pollution behaves as if it were freely floating until it hits one of the two limits. The model provides three main results. First, we show that targets can affect pollution accumulation even when they are slack at the current time. Solutions of the model show that pollution becomes an S-shaped locus of the fundamentals. Second, we show that binding targets will lead to more stable pollution rate determination within the boundaries, than free floating. Finally, stabilization of pollution stock is related to the credibility of the regulator in defending the targets.

Counting carbon: historic emissions from fossil fuels, long-run measures of sustainable development and carbon debt

This article examines how to account for the welfare effects of carbon dioxide emissions, using the historical experiences of Britain and the USA from the onset of the industrial revolution to the present. While a single country might isolate itself from the detrimental effects of global warming in the short run, in the long all countries are unable to free ride. Thus, we support the use of a single global price for carbon dioxide emissions. The calculated price should decrease as we move back in time to take into account that carbon dioxide is a stock pollutant, and that one unit added to the present large stock is likely to cause more damage than a unit emitted under the lower concentration levels in the past. We incorporate the annual costs of British and US carbon emissions into genuine savings, and calculate the accumulated costs of their carbon dioxide emissions. Enlarging the scope and calculating the cumulative cost of carbon dioxide from the four largest emitters gives new insights into the question of who is responsible for climate change.

Increase in Risk and its Effects on Welfare and Optimal Policies in a Dynamic Setting: The Case of Global Pollution

This paper studies the effects of an increase in risk on welfare and optimal policies in a stochastic dynamic model of global pollution. In a first step, we focus on the case of a single decision maker, and make use of an approach pioneered by Kimball (2014) for studying the impact of a marginal change in risk in optimal stochastic control models. Using a simple model with only one state variable and one control variable, we show how the optimal carbon tax responds to an increase in risk. It is found that the third derivative of the decay function of the stock of pollution may play a decisive role. In a second step, we investigate the extent to which Kimball’s approach may be extended to the case of stochastic dynamic games. We show how strategic interactions complicate the task of evaluating the effects of an increase in risk. Interestingly, in a dynamic model of the tragedy of the commons, we find that an increase in risk can increase welfare even though all agents are risk averse. The reason is that higher risk can cause agents to be more conservative, and this mitigates the tragedy of the commons.