Optimal Environmental Policy for a Mine Under Polluting Waste Rocks and Stock Pollution

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Sammanfattning

This study analyzes socially optimal environmental policy for a mine with a model that takes into account waste or waste rock production and abatement possibilities of the mine. We develop a model, in which the mine produces an externality related to the waste rocks, such as acid mine drainage. We find that the extraction rate tends to be lower in a mine with higher waste rock production, and that the optimal tax on the waste rock production is strictly increasing in time. We extend the model to incorporate an additional externality in the form of a stock pollutant. We analyze the optimal taxes and show that the typical result that the time path of the tax on the stock pollutant is inverted U-shaped may be lost in a mine model with abatement possibility and fixed operation period.

Originalspråkengelska
TidskriftEnvironmental and Resource Economics
Volym73
Utgåva1
Sidor (från-till)133-158
Antal sidor26
ISSN0924-6460
DOI
StatusPublicerad - maj 2019
MoE-publikationstypA1 Tidskriftsartikel-refererad

Vetenskapsgrenar

  • 1172 Miljövetenskap
  • 511 Nationalekonomi

Citera det här

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title = "Optimal Environmental Policy for a Mine Under Polluting Waste Rocks and Stock Pollution",
abstract = "This study analyzes socially optimal environmental policy for a mine with a model that takes into account waste or waste rock production and abatement possibilities of the mine. We develop a model, in which the mine produces an externality related to the waste rocks, such as acid mine drainage. We find that the extraction rate tends to be lower in a mine with higher waste rock production, and that the optimal tax on the waste rock production is strictly increasing in time. We extend the model to incorporate an additional externality in the form of a stock pollutant. We analyze the optimal taxes and show that the typical result that the time path of the tax on the stock pollutant is inverted U-shaped may be lost in a mine model with abatement possibility and fixed operation period.",
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Optimal Environmental Policy for a Mine Under Polluting Waste Rocks and Stock Pollution. / Lappi, Pauli Antero; Ollikainen, Markku Martti Olavi.

I: Environmental and Resource Economics, Vol. 73, Nr. 1, 05.2019, s. 133-158.

Forskningsoutput: TidskriftsbidragArtikelVetenskapligPeer review

TY - JOUR

T1 - Optimal Environmental Policy for a Mine Under Polluting Waste Rocks and Stock Pollution

AU - Lappi, Pauli Antero

AU - Ollikainen, Markku Martti Olavi

PY - 2019/5

Y1 - 2019/5

N2 - This study analyzes socially optimal environmental policy for a mine with a model that takes into account waste or waste rock production and abatement possibilities of the mine. We develop a model, in which the mine produces an externality related to the waste rocks, such as acid mine drainage. We find that the extraction rate tends to be lower in a mine with higher waste rock production, and that the optimal tax on the waste rock production is strictly increasing in time. We extend the model to incorporate an additional externality in the form of a stock pollutant. We analyze the optimal taxes and show that the typical result that the time path of the tax on the stock pollutant is inverted U-shaped may be lost in a mine model with abatement possibility and fixed operation period.

AB - This study analyzes socially optimal environmental policy for a mine with a model that takes into account waste or waste rock production and abatement possibilities of the mine. We develop a model, in which the mine produces an externality related to the waste rocks, such as acid mine drainage. We find that the extraction rate tends to be lower in a mine with higher waste rock production, and that the optimal tax on the waste rock production is strictly increasing in time. We extend the model to incorporate an additional externality in the form of a stock pollutant. We analyze the optimal taxes and show that the typical result that the time path of the tax on the stock pollutant is inverted U-shaped may be lost in a mine model with abatement possibility and fixed operation period.

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KW - Exhaustible resources

KW - Mining

KW - Optimal control

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KW - Q38

KW - Q50

KW - Q58

KW - OPTIMAL TIME PATH

KW - OPTIMAL ABATEMENT

KW - FOSSIL-FUELS

KW - EXTRACTION

KW - CAPACITY

KW - CHOICE

KW - GRADE

KW - ORDER

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