Title

Modeling of environmental adaptation versus pollution mitigation

Document Type

Article

Publication Date

1-1-2014

Abstract

The paper combines analytic and numeric tools to investigate a nonlinear optimal control problem relevant to the economics of climate change. The problem describes optimal investments into pollution mitigation and environmental adaptation at a macroeconomic level. The steady-state analysis of this problem focuses on the optimal ratio between adaptation and mitigation. In particular, we analytically prove that the long-term investments into adaptation are profitable only for economies above certain efficiency threshold. Numerical simulation is provided to estimate how the economic efficiency and capital deterioration affect the optimal policy. © EDP Sciences, 2014.

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