The Dynamics of Optimal Abatement Strategies for Interacting Pollutants - An illustration in the greenhouse

We investigate optimal abatement strategies for cumulative and interacting pollutants. We show that different decay rates can cause non-monotonic behavior in the optimal paths of emissions, the aggregate level of pollution, and even the relative optimal price for emissions. This contrasts strikingly with the case of a single pollutant. The results are illustrated by numerical simulations, first for instructive fictitious and second for more realistic parameters mimicking the greenhouse problem. The results add to the skepticism existing about whether the concept of global warming potential is a useful indicator for the optimal relative abatement of different GHGs over time. In fact, we show that a constant index suitable for comparing dynamically different pollutants with respect to their economic harmfulness does not exist.

Moslener, Ulf and Till Requate (2009), The Dynamics of Optimal Abatement Strategies for Interacting Pollutants - An illustration in the greenhouse, Ecological Economics 86 , 1521-1534