Pollution control for a spatially structured economic growth system

TL;DR

This paper develops a spatially structured economic growth model incorporating pollution control, taxation, and localized environmental interventions, analyzing optimal strategies and their impacts through computational experiments.

Contribution

It introduces a novel model with localized environmental interventions within a spatial economic growth framework, extending previous environmental control studies.

Findings

Optimal pollution control strategies identified.

Localized interventions can effectively reduce pollution levels.

Model demonstrates the trade-offs between economic utility and environmental costs.

Abstract

In this paper investigations by the same authors on environmental issues concerning the control of the pollution produced by human activities have been extended to include costs related to environmental interventions. The proposed model consists of a spatially structured dynamic economic growth model which takes into account the level of pollution induced by production, a possible taxation based on the amount of produced pollution, and possible environmental interventions. It has been analyzed an optimal harvesting control problem with an objective function composed of four terms, namely the intertemporal utility of the decision maker, the space-time average of the level of pollution in the habitat, the disutility due to the imposition of taxation and the cost of environmental interventions. A specific novelty in the model proposed here is the localization of the possible interventions to a subregion of the whole habitat. Computational experiments have been carried out to exemplify the outcomes of the proposed model.