Optimal Control of Pollutants with Delayed Stock Accumulation

CER-ETH - Center of Economic Research at ETH Zurich, Working Paper No. 08/91

25 Pages Posted: 29 Jul 2008  

Ralph Winkler

University of Bern - Department of Economics; University of Bern - Oeschger Centre for Climate Change Research

Date Written: July 1, 2008

Abstract

We study the optimal control of a pollutant that accumulates with a delay. We find that optimal paths are, in general, non-monotonic and oscillatory, but monotonic if the objective function is additively separable. Hence, using additively separable objective functions as an approximation to a general objective function may be a misspecification. With a numerical example we illustrate that an additively separable approximation performs considerably worse in delayed compared to instantaneous stock accumulation.

Keywords: additively separable objective, approximated objective, delayed optimal control, optimal pollution control

JEL Classification: Q50, C61

Suggested Citation

Winkler, Ralph, Optimal Control of Pollutants with Delayed Stock Accumulation (July 1, 2008). CER-ETH - Center of Economic Research at ETH Zurich, Working Paper No. 08/91. Available at SSRN: https://ssrn.com/abstract=1184702 or http://dx.doi.org/10.2139/ssrn.1184702

Ralph Winkler (Contact Author)

University of Bern - Department of Economics ( email )

Schanzeneckstrasse 1
Bern, 3001
Switzerland
+41 31 631 4508 (Phone)

HOME PAGE: http://www.ralph-winkler.de

University of Bern - Oeschger Centre for Climate Change Research ( email )

Zähringerstrasse 25
Bern, 3012
Switzerland

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