Optimal Abatement in Dynamic Multi-Pollutant Problems When Pollutants Can Be Complements or Substitutes

23 Pages Posted: 29 Apr 2005 Last revised: 18 Aug 2008

See all articles by Ulf Moslener

Ulf Moslener

Frankfurt School of Finance & Management gemeinnützige GmbH

Till Requate

University of Kiel - Department of Economics

Date Written: April 2005

Abstract

We analyze a dynamic multi-pollutant problem where abatement costs of several pollutants are not separable. The pollutants can be either technological substitutes or complements. Environmental damage is induced by the stock of accumulated pollution. We find that optimal emission paths are qualitatively different for substitutes and complements. We derive general properties governing optimal emission paths and present numerical examples to illustrate our main results. In particular we find that optimal emission paths need not be monotonic, even for highly symmetric pollutants. Finally, we describe a comparatively simple method to implement the optimal path without explicitly knowing its shape.

Keywords: Multi-pollution, abatement technology, accumulating pollutants

JEL Classification: Q2, L5

Suggested Citation

Moslener, Ulf and Requate, Till, Optimal Abatement in Dynamic Multi-Pollutant Problems When Pollutants Can Be Complements or Substitutes (April 2005). ZEW - Centre for European Economic Research Discussion Paper No. 05-027. Available at SSRN: https://ssrn.com/abstract=711067 or http://dx.doi.org/10.2139/ssrn.711067

Ulf Moslener (Contact Author)

Frankfurt School of Finance & Management gemeinnützige GmbH ( email )

Adickesallee 32-34
Frankfurt am Main, 60322
Germany

Till Requate

University of Kiel - Department of Economics ( email )

Olshausenstrasse 40
24098 Kiel, 24098
Germany
+49 431 880-4424 (Phone)
+49 431 880-1618 (Fax)

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