Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/53364 
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dc.contributor.authorPommeret, Audeen
dc.contributor.authorPrieur, Fabienen
dc.date.accessioned2011-01-31-
dc.date.accessioned2011-12-15T11:33:59Z-
dc.date.available2011-12-15T11:33:59Z-
dc.date.issued2009-
dc.identifier.urihttp://hdl.handle.net/10419/53364-
dc.description.abstractThe design of environmental policy typically takes place within a framework in which uncertainty over the future impact of pollution and two different kinds of irreversibilities interact. The first kind of irreversibility concerns the sunk cost of environmental degradation; the second is related to the sunk cost of environmental policy. Clearly, the two irreversibilities pull in opposite directions: policy irreversibility leads to more pollution and a less/later policy while environmental irreversibility generates less pollution and a more/sooner policy. Using a real option approach and an infinite time horizon model, this paper considers both irreversibilities simultaneously. The model first is developed by paying particular attention to the option values related to pollution and policy adoption. Solving the model in closed form then provides solutions for both the optimal pollution level and the optimal environmental policy timing. Finally, the model is calibrated with the purpose of appraising which irreversibility has the prevailing effect and what is the overall impact of both irreversibilities on pollution and policy design.en
dc.language.isoengen
dc.publisher|aFondazione Eni Enrico Mattei (FEEM) |cMilanoen
dc.relation.ispartofseries|aNota di Lavoro |x10.2009en
dc.subject.jelQ58en
dc.subject.jelD81en
dc.subject.ddc330en
dc.subject.keywordEnvironmental Policyen
dc.subject.keywordEnvironmental Irreversibilityen
dc.subject.keywordPolicy Irreversibilityen
dc.titleDouble irreversibility and environmental policy design-
dc.typeWorking Paperen
dc.identifier.ppn644905174en
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen

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