Optimal Management of Environmental Externalities with Time Lags and Uncertainty

• Published in: Environmental & resource economics Vol. 68; no. 3; pp. 473 - 499
• Main Authors: Kuwayama, Yusuke, Brozović, Nicholas
• Format: Journal Article
• Language: English
• Published: Dordrecht Springer Netherlands 01.11.2017; Springer Nature B.V
• Subjects: discount rate; Economic models; Economic Policy; Economics; Economics and Finance; emissions; Environmental Economics; Environmental Law/Policy/Ecojustice; Environmental Management; Environmental policy; Externality; Initial conditions; issues and policy; pollutants; Pollution control; Ratings & rankings; Resource management; Stochastic models; Stochastic processes; Time lag; Uncertainty; Persistence; Q2; Time lags; Uncertainty; Q5; D9; Environmental externalities; H23

Many environmental externalities occur with time lags that can range from a few days to several centuries in length, and many of these externalities are also subject to uncertainty. In this paper, we examine the key features of an optimal policy to manage environmental externalities that are both la...