Pollution control in an uncertain environment

Tsur, Yacov; Zemel, Amos

doi:10.1016/s0165-1889(97)00087-0

Cited by 102 publications

(61 citation statements)

References 5 publications

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“…Otherwise, the discounting effect dominates, and the uncertainty steady state of the pollution process lies above its nonevent counterpart. This type of ambiguity has been discussed by Clarke and Reed (1994); Tsur and Zemel (1998) and Aronsson et al (1998).…”

Section: "Doomsday" Eventmentioning

confidence: 80%

“…In contrast, earlier models of such events (Clarke and Reed, 1994;Tsur and Zemel, 1998;Aronsson et al, 1998;Gjerde et al, 1999;Polasky et al, 2011) refer to a "doomsday event" in which the catastrophic occurrence abruptly ceases all economic activities, giving rise to the post-event value v 2 ≡ 0. The latter specification offers the obvious advantage of simplicity, because in this case the hazard effect is equivalent to increasing the discount rate from ρ to ρ + h(P ).…”

Section: Catastrophic Damagementioning

confidence: 97%

“…For example, the shift can be triggered when some a-priori unknown threshold is crossed (as in Tsur and Zemel, 1996;Naevdal, 2006). Alternatively, it may be due to a random occurrence controlled by some given hazard rate (Clarke and Reed, 1994;Tsur and Zemel, 1998;Gjerde et al, 1999;Haurie and Moresino, 2006). The models differ also in the specification of the postoccurrence outcome.…”

Section: Introductionmentioning

confidence: 99%

“…This is indeed what we find here, but it is not the general conclusion in the literature. For example, several studies (Clarke and Reed, 1994;Tsur and Zemel, 1998;Aronsson et al, 1998;Gjerde et al, 1999;Polasky et al, 2011) consider "doomsday" regime shifts associated with a total loss of value. In this case the hazard rate is effectively added to the discount rate, increasing impatience and implying enhanced emissions (for a constant hazard rate) and ambiguous behavior (for increasing hazard rates).…”

Section: Introductionmentioning

confidence: 99%

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Regime shifts and uncertainty in pollution control

Zeeuw

Zemel

2012

Journal of Economic Dynamics and Control

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We develop a simple model of managing a system subject to pollution damage under risk of an abrupt and random jump in the damage coefficient. The model allows the full dynamic characterization of the optimal emission policies under uncertainty. The results, that imply prudent behavior due to uncertainty, are compared with the ambiguous outcomes reported in the literature for similar models. The differences are explained in terms of the properties of the damage function associated with each model. The framework is used to analyze the adaptation vs. mitigation dilemma and provides a simple criterion to determine whether adaptation activities should be undertaken promptly, delayed to some future date, or avoided altogether. Terms of use: Documents in EconStor mayJEL-Code: Q280, Q520, Q540.

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Section: "Doomsday" Eventmentioning

confidence: 80%

Section: Catastrophic Damagementioning

confidence: 97%

Section: Introductionmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Regime shifts and uncertainty in pollution control

Zeeuw

Zemel

2012

Journal of Economic Dynamics and Control

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“…Tsur & Zemel, 1998, or De Zeeuw & Zemel, 2012, for analysis without AGT, and Bretschger &Vinogradova, 2014, andSoretz, 2007, for studies on the sharing of investment between productive capital and abatement measures in a AK setting.) Instead, we focus on shocks that affect the economy (like changes in international prices, demands shocks, etc.)…”

Section: Introductionmentioning

confidence: 99%

Green Technology Adoption and the Business Cycle

Bourgeon

Hovsepian

2017

SSRN Journal

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We analyze the adoption of green technology in a dynamic economy affected by random shocks where demand spillovers are the main driver of technological improvements. Firms' beliefs and consumers' anticipations drive the path of the economy. We derive the optimal policy of investment subsidy and the expected time and likelihood of reaching a targeted level of environmental quality under economic uncertainty. This allows us to estimate the value that should be given to the environment in order to avoid an environmental catastrophe as a function of the strength of spillover effects. JEL-Codes: E300, O300, O440, Q500. Terms of use: Documents in

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Behavioral response to contamination risk information in a spatially explicit groundwater environment: Experimental evidence

Jing-yuan

Michael

Duke

et al. 2014

Water Resources Research

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This paper assesses the effectiveness of aquifer monitoring information in achieving more sustainable use of a groundwater resource in the absence of management policy. Groundwater user behavior in the face of an irreversible contamination threat is studied by applying methods of experimental economics to scenarios that combine a physics-based, spatially explicit, numerical groundwater model with different representations of information about an aquifer and its risk of contamination. The results suggest that the threat of catastrophic contamination affects pumping decisions: pumping is significantly reduced in experiments where contamination is possible compared to those where pumping cost is the only factor discouraging groundwater use. The level of information about the state of the aquifer also affects extraction behavior. Pumping rates differ when information that synthesizes data on aquifer conditions (a ''risk gauge'') is provided, despite invariant underlying economic incentives, and this result does not depend on whether the risk information is location-specific or from a whole aquifer perspective. Interestingly, users increase pumping when the risk gauge signals good aquifer status compared to a no-gauge treatment. When the gauge suggests impending contamination, however, pumping declines significantly, resulting in a lower probability of contamination. The study suggests that providing relatively simple aquifer condition guidance derived from monitoring data can lead to more sustainable use of groundwater resources.

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Pollution control in an uncertain environment

Cited by 102 publications

References 5 publications

Regime shifts and uncertainty in pollution control

Regime shifts and uncertainty in pollution control

Green Technology Adoption and the Business Cycle

Behavioral response to contamination risk information in a spatially explicit groundwater environment: Experimental evidence

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