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Modeling of environmental adaptation versus pollution mitigation

Author

Listed:
  • YATSENKO, Yuri

    (School of Business, Houston Baptist University)

  • HRITONENKO, Natali

    (Department of Mathematics, Prairie View A&M University)

  • BRECHET, Thierry

    (Université catholique de Louvain, CORE and Louvain School of Management, Belgium)

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.

Suggested Citation

  • YATSENKO, Yuri & HRITONENKO, Natali & BRECHET, Thierry, 2014. "Modeling of environmental adaptation versus pollution mitigation," LIDAM Discussion Papers CORE 2014006, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    • Handle: RePEc:cor:louvco:2014006
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    File URL: https://sites.uclouvain.be/core/publications/coredp/coredp2014.html
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    References listed on IDEAS

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    Cited by:

    1. Bréchet, Thierry & Hritonenko, Natali & Yatsenko, Yuri, 2016. "Domestic environmental policy and international cooperation for global commons," Resource and Energy Economics, Elsevier, vol. 44(C), pages 183-205.
    2. Natali Hritonenko & Victoria Hritonenko & Yuri Yatsenko, 2020. "Games with Adaptation and Mitigation," Games, MDPI, vol. 11(4), pages 1-16, December.

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    More about this item

    Keywords

    climate change; environmental adaptation; mitigation; optimal control; steady state analysis;
    All these keywords.

    JEL classification:

    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • R20 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - Household Analysis - - - General

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