Growth and Irreversible Pollution: Are Emission Permits a Means of Avoiding Environmental and Poverty Traps?

Fabien Prieur 1 Alain Jean-Marie 2, 3 Mabel Tidball 1
2 MAESTRO - Models for the performance analysis and the control of networks
CRISAM - Inria Sophia Antipolis - Méditerranée
3 LIRMM/HE - Hors Équipe
LIRMM - Laboratoire d'Informatique de Robotique et de Microélectronique de Montpellier
Abstract : We consider an OLG model with emissions arising from production and potentially irreversible pollution. Pollution control consists of the assignment of permits to firms; private agents also can abate pollution. In this setting, we prove that multiple equilibria exist. Due to the possible irreversibility of pollution, the economy can be dragged into both environmental and poverty traps. First, we show that choosing an emission quota at the lowest level beyond a critical threshold is a means to avoid these two types of traps. We also prove that when the agents do not engage in maintenance, a reduction of the quota leads to a reduction in pollution but also to slower capital accumulation. In contrast, when agents do engage in maintenance, a reduction of the quota provides a double dividend.
Type de document :
Article dans une revue
Macroeconomic Dynamics, Cambridge University Press (CUP), 2013, 17 (2), pp.261-293. 〈10.1017/S1365100511000113〉
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https://hal.inria.fr/hal-00862922
Contributeur : Alain Jean-Marie <>
Soumis le : mardi 17 septembre 2013 - 18:18:33
Dernière modification le : jeudi 11 janvier 2018 - 16:57:54

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Fabien Prieur, Alain Jean-Marie, Mabel Tidball. Growth and Irreversible Pollution: Are Emission Permits a Means of Avoiding Environmental and Poverty Traps?. Macroeconomic Dynamics, Cambridge University Press (CUP), 2013, 17 (2), pp.261-293. 〈10.1017/S1365100511000113〉. 〈hal-00862922〉

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