Optimal input substitution of a firm facing an environmental constraint

• Published in: European journal of operational research Vol. 99; no. 2; pp. 336 - 352
• Main Authors: Hartl, Richard F., Kort, Peter M.
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.06.1997; Elsevier; Elsevier Sequoia S.A
• Series: European Journal of Operational Research
• Subjects: Control theory; Decision analysis; Dynamic programming; Environment; Environmental management; Input substitution; investment; Optimal control; Optimization; Pollution control; Production; Production capacity; Studies; Environment; investment; Dynamic programming; Optimal control; Input substitution; Production

In this paper we consider the dynamic behavior of a firm subject to environmental regulation. As a social planner the government wants to reduce the level of pollution. To reach that aim it can, among others, set an upper limit on polluting emissions of the firm. The paper determines how this policy...