Optimal Dynamic Environmental Policies of a Profit Maximizing Firm

摘要

The authors study the optimal environmental policy of the firm for different scenario's dependent on (costs of) production technologies, financing costs and governmental policy. The governmental measures to be considered are: investment grants on cleaner production technologies and on abatement activities; taxes imposed on environmental pollution. The problem will be defined as an optimal control model. In the model, the firm influences its pollution output through the choice of its production technology. Available are a more capital-extensive and dirty activity, a more capital-intensive and clean activity, and an abatement activity that eliminates pollution completely or partially.