Hostname: page-component-586b7cd67f-l7hp2 Total loading time: 0 Render date: 2024-11-29T01:21:36.903Z Has data issue: false hasContentIssue false

Modeling of Environmental Adaptation versus Pollution Mitigation

Published online by Cambridge University Press:  20 June 2014

Y. Yatsenko*
Affiliation:
School of Business, Houston Baptist University, 7502 Fondren, Houston, Texas 77074, USA
N. Hritonenko
Affiliation:
Department of Mathematics, Prairie View A&M University, Prairie View, Texas 77446, USA
T. Bréchet
Affiliation:
Université catholique de Louvain, CORE and Louvain School of Management, Belgium
*
Corresponding author. E-mail: [email protected]
Get access

Abstract

The paper combines analytic and numeric tools to investigate a nonlinear optimal control problem relevant to the economics of climate change. The problem describes optimal investments into pollution mitigation and environmental adaptation at a macroeconomic level. The steady-state analysis of this problem focuses on the optimal ratio between adaptation and mitigation. In particular, we analytically prove that the long-term investments into adaptation are profitable only for economies above certain efficiency threshold. Numerical simulation is provided to estimate how the economic efficiency and capital deterioration affect the optimal policy.

Type
Research Article
Copyright
© EDP Sciences, 2014

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Agrawala, S., Bosello, F., Carraro, C., de Cian, E., Lanzi, E.. Adapting to climate change: costs, benefits, and modelling approaches. International Review of Environmental and Resource Economics, 5 (2011), 245-284. CrossRefGoogle Scholar
R.J. Barro, X. Sala-i-Martin . Economic Growth, NewYork, McGraw Hill, (1995).
Bosello, F., Carraro, C., de Cian, E.. Climate policy and the optimal balance between mitigation, adaptation and unavoided damage. Climate Change Economics, 1 (2010), no. 2, 71-92. CrossRefGoogle Scholar
Bréchet, Th., Hritonenko, N., Yatsenko, Yu.. Adaptation and mitigation in long-term climate policy. Environmental and Resource Economics, 55 (2013), 217-243. CrossRefGoogle Scholar
Bretschger, L., Valente, S.. Climate change and uneven development. The Scandinavian Journal of Economics, 113 (2011), 825-845 CrossRefGoogle Scholar
Buob, S., Stephan, G.. To mitigate or to adapt: how to combat with global climate change. European Journal of Political Economy, 27 (2011), 1-16. CrossRefGoogle Scholar
M.R. Caputo. Foundations of Dynamic Economic Analysis: Optimal Control Theory and Applications, Cambridge University Press, New York, (2005).
C. Corduneanu. Integral Equations and Applications. Cambridge University Press, Cambridge UK, (1991).
De Bruin, K., Dellink, R., Tol, aR.. AD-DICE: an implementation of adaptation in the DICE model. Climatic Change, 95 (2009), no. 1, 63-81. CrossRefGoogle Scholar
Economides, G., Philippopoulos, A.. Growth enhancing policy is the means to sustain the environment. Review of Economic Dynamics, 11 (2008), 207-219. CrossRefGoogle Scholar
Goetz, R., Hritonenko, N., Xabadia, A., Yatsenko, Ê Yu.. Forest management for timber and carbon sequestration in the presence of climate change: The case of Pinus Sylvestris. Ecological Economics, 88 (2013), 86-96. CrossRefGoogle Scholar
Hritonenko, N., Yatsenko, Yu.. Turnpike properties of optimal delay in integral dynamic models. Journal of Optimization Theory and Applications, 127 (2005), 109-127. CrossRefGoogle Scholar
Hritonenko, N., Yatsenko, Yu.. Technological innovations, economic renovation, and anticipation effects. Journal of Mathematical Economics, 46 (2010), 1064-1078. CrossRefGoogle Scholar
Hritonenko, N., Yatsenko, Yu.. Energy substitutability and modernization of energy-consuming technologies. Energy Economics, 34 (2012), 1548-1556. CrossRefGoogle Scholar
Hritonenko, N., Yatsenko, Yu.. Modeling of environmental adaptation: amenity vs productivity and modernization. Climate Change Economics, 4 (2013), no. 2, 1-24. CrossRefGoogle Scholar
IPCC (2007). Climate Change 2007, Fourth Assessment Report of the Intergovernmental Panel on Climate Change, Cambridge University Press.
Jones, L.E., Manuelli, R.E.. Endogenous policy choice: the case of pollution and growth. Review of Economic Dynamics, 4 (2001), 369-405. CrossRefGoogle Scholar
Kane, S., Shogren, J.F.. Linking adaptation and mitigation in climate change policy. Climatic Change, 45 (2000), 75-102. CrossRefGoogle Scholar
D.G. Luenberger. Introduction to Dynamic Systems: Theory, Models, and Applications. John Wiley and Sons, New York, (1979).
W.D. Nordhaus. A Question of Balance: Weighing the Options on Global Warming Policies. Yale University Press, New Haven & London, (2008).
Rosenzweig, C., Parry, M.L.. Potential impact of climate change on world food supply. Nature, 367 (1994), 133-138. CrossRefGoogle Scholar
Shalizi, S., Lecocq, F.. To mitigate or to adapt; is that the question? Observations on an appropriate response to the climate change challenge to development strategies. The World Bank Research Observer, 2 (2009), 1-27. Google Scholar
Smulders, S., Gradus, R.. Pollution abatement and long-term growth. European Journal of Political Economy, 12 (1996), 505-532. CrossRefGoogle Scholar
Vellinga, N.. Multiplicative utility and the influence of environmental care on the short-term economic growth rate. Economic Modelling, 16 (1999), 307-330.CrossRefGoogle Scholar