Amigues, Jean-Pierre and Moreaux, Michel (2012) Potential Irreversible Catastrophic Shifts of the Assimilative Capacity of the Environment. TSE Working Paper, n. 12-276

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Pollution accumulation may result in more or less severe losses of natural self-cleaning capacities. We study a polluting resource management problem submitted to a potential shift from a high to a low pollution self-regeneration regime be crossed some critical pollution stock threshold. We first describe the optimal resource exploitation policy absent the threshold. When at the threshold, the society has two options: either stabilizing the pollution level to avoid the loss of natural self-cleaning capacity or deliberately cross the threshold and switch to the low regeneration regime. We show under fairly general assumptions that there exists a unique critical pollution stock level such that thresholds located below this level will induce a switch from the high to the low regeneration regime while thresholds located above it will imply maintaining the high regime forever. We characterize the optimal policies in these two scenarios and show that triggering the low regeneration regime requires an upward jump of the resource consumption rate at the optimal switching time.

Item Type: Monograph (Working Paper)
Language: English
Date: 8 February 2012
JEL Classification: Q15 - Land Ownership and Tenure; Land Reform; Land Use; Irrigation
Q17 - Agriculture in International Trade
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 09 Jul 2014 17:23
Last Modified: 02 Apr 2021 15:47
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