Transboundary pollution externalities: think globally, act locally?

DOI10.1016/J.JMATECO.2021.102511zbMATH Open1471.91356arXiv1910.04469OpenAlexW3137580266MaRDI QIDQ2237871FDOQ2237871

Authors: Danilo Liuzzi, Simone Marsiglio, Davide La Torre 

Publication date: 28 October 2021

Published in: Journal of Mathematical Economics (Search for Journal in Brave)

Abstract: We analyze the implications of transboundary pollution externalities on environmental policymaking in a spatial and finite time horizon setting. We focus on a simple regional optimal pollution control problem in order to compare the global and local solutions in which, respectively, the transboundary externality is and is not taken into account in the determination of the optimal policy by individual local policymakers. We show that the local solution is suboptimal and as such a global approach to environmental problems is effectively needed. Our conclusions hold true in different frameworks, including situations in which the spatial domain is either bounded or unbounded, and situations in which macroeconomic-environmental feedback effects are taken into account. We also show that if every local economy implements an environmental policy stringent enough, then the global average level of pollution will fall. If this is the case, over the long run the entire global economy will be able to achieve a completely pollution-free status.

Full work available at URL: https://arxiv.org/abs/1910.04469

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zbMATH Keywords

local and global solutionsspatial dynamicsregional optimal controltransboundary pollution externalities

Mathematics Subject Classification ID

Environmental economics (natural resource models, harvesting, pollution, etc.) (91B76) Existence theories for optimal control problems involving partial differential equations (49J20) Spatial models in economics (91B72)

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Cited In (10)

• When Does Compromise Prevent More Pollution?
• The externalities problem of transboundary and persistent pollution
• TRANSBOUNDARY WATER MANAGEMENT: CAN ISSUE LINKAGE HELP MITIGATE EXTERNALITIES?
• From firm to global-level pollution control: the case of transboundary pollution
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• Transboundary pollution and household mobility: are they equivalent?
• An equilibrium model of city with atmospheric pollution dispersion
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• Trade and transboundary pollution: Spatial separation reconsidered

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