Network-Based Optimal Control of Pollution Growth

TL;DR

This paper develops a network-based model for optimal pollution control, analyzing the trade-offs between green and non-green technologies over space and time, with explicit solutions for linear cost cases.

Contribution

It introduces a novel network-structured spatial component in pollution control models and analyzes technology trade-offs in this setting.

Findings

Explicit solutions for linear pollution costs.

Insights into green vs. non-green technology trade-offs.

Network structure impacts optimal control strategies.

Abstract

This paper studies a model for the optimal control (by a centralized economic agent which we call the planner) of pollution diffusion over time and space. The controls are the investments in production and depollution and the goal is to maximize an intertemporal utility function. The main novelty is the fact that the spatial component has a network structure. Moreover, in such a time-space setting we also analyze the trade-off between the use of green or non-green technologies: this also seems to be a novelty in such a setting. Extending methods of previous papers, we can solve explicitly the problem in the case of linear costs of pollution.