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Pollution diffusion and abatement activities across space and over time

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  • La Torre, Davide
  • Liuzzi, Danilo
  • Marsiglio, Simone
Abstract
We analyze the spatio-temporal dynamics of capital and pollution in an economic growth model with purposive environmental protection activities. The production process of a unique homogeneous good generates pollution, thus the increases in output associated with economic growth tend to rise the stock of pollution. Pollution is a negative production externality which thus feeds back on the economy lowering the level of output; in order to compensate for such a negative effect associated with economic development, pollution is reduced by publicly funded abatement activities. We firstly consider a Solow-type framework in which economic and environmental policies are completely exogenous, and then we move to a Ramsey-type context in which they are endogenously determined. We analyze the spatio-temporal dynamics of the model economy through numerical simulations, and we consider two different specifications of the production function (a globally concave and a convex–concave technology) in order to stress the role that eventual poverty traps might play on both economic and environmental outcomes. We show that in the convex–concave technology framework, whenever rich regions are substantially rich diffusion can help poor regions to escape their poverty traps; if however they are not rich enough diffusion might condemn also rich regions to collapse. However, even if rich regions are particularly rich whenever the pollution externality is strong, the whole spatial economy might be doomed to collapse.

Suggested Citation

  • La Torre, Davide & Liuzzi, Danilo & Marsiglio, Simone, 2015. "Pollution diffusion and abatement activities across space and over time," Mathematical Social Sciences, Elsevier, vol. 78(C), pages 48-63.
    • Handle: RePEc:eee:matsoc:v:78:y:2015:i:c:p:48-63
    DOI: 10.1016/j.mathsocsci.2015.09.001
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    Cited by:

    1. Herb Kunze & Davide La Torre & Simone Marsiglio, 2019. "A Multicriteria Macroeconomic Model with Intertemporal Equity and Spatial Spillovers," Papers 1911.08247, arXiv.org.
    2. Simone Marsiglio & Marco Tolotti, 2018. "Endogenous growth and technological progress with innovation driven by social interactions," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 65(2), pages 293-328, March.
    3. Carmen Camacho & Alexandre Cornet, 2021. "Diffusion of soil pollution in an agricultural economy. The emergence of regions, frontiers and spatial patterns," Working Papers halshs-02652191, HAL.
    4. Javier de Frutos & Guiomar Martín-Herrán, 2016. "Pollution control in a multiregional setting: a differential game with spatially distributed controls," Gecomplexity Discussion Paper Series 201601, Action IS1104 "The EU in the new complex geography of economic systems: models, tools and policy evaluation", revised Jan 2016.
    5. Roman G. Smirnov & Kunpeng Wang, 2019. "The Hamiltonian approach to the problem of derivation of production functions in economic growth theory," Papers 1906.11224, arXiv.org.
    6. Trevor Kollmann & Simone Marsiglio & Sandy Suardi & Marco Tolotti, 2021. "Social interactions, residential segregation and the dynamics of tipping," Journal of Evolutionary Economics, Springer, vol. 31(4), pages 1355-1388, September.
    7. Torre, Davide La & Liuzzi, Danilo & Marsiglio, Simone, 2021. "Transboundary pollution externalities: Think globally, act locally?," Journal of Mathematical Economics, Elsevier, vol. 96(C).
    8. Davide La Torre & Danilo Liuzzi & Simone Marsiglio, 2022. "Geographical heterogeneities and externalities in an epidemiological‐macroeconomic framework," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(5), pages 1154-1181, October.
    9. Simone Marsiglio & Fabio Privileggi, 2021. "On the economic growth and environmental trade-off: a multi-objective analysis," Annals of Operations Research, Springer, vol. 296(1), pages 263-289, January.
    10. Bella, Giovanni & Liuzzi, Danilo & Mattana, Paolo & Venturi, Beatrice, 2020. "Equilibrium selection in an environmental growth model with a S-shaped production function," Chaos, Solitons & Fractals, Elsevier, vol. 130(C).
    11. Herb Kunze & Davide Torre & Simone Marsiglio, 2022. "Sustainability and spatial spillovers in a multicriteria macroeconomic model," Annals of Operations Research, Springer, vol. 311(2), pages 1067-1084, April.
    12. Roman G. Smirnov & Kunpeng Wang, 2017. "In search of a new economic model determined by logistic growth," Papers 1711.02625, arXiv.org, revised Oct 2018.
    13. Bucci, Alberto & La Torre, Davide & Liuzzi, Danilo & Marsiglio, Simone, 2019. "Financial contagion and economic development: An epidemiological approach," Journal of Economic Behavior & Organization, Elsevier, vol. 162(C), pages 211-228.
    14. de Frutos, Javier & Martín-Herrán, Guiomar, 2019. "Spatial vs. non-spatial transboundary pollution control in a class of cooperative and non-cooperative dynamic games," European Journal of Operational Research, Elsevier, vol. 276(1), pages 379-394.
    15. Berenguer, M.I. & Gámez, D. & Kunze, H. & La Torre, D. & Ruiz Galán, M., 2024. "Solving direct and inverse problems for Fredholm-type integro-differential equations with application to pollution diffusion modeling," Mathematics and Computers in Simulation (MATCOM), Elsevier, vol. 223(C), pages 394-404.
    16. Carmen Camacho & Alexandre Cornet, 2021. "Diffusion of soil pollution in an agricultural economy. The emergence of regions, frontiers and spatial patterns," PSE Working Papers halshs-02652191, HAL.

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