| By: |
Ingmar, SCHUMACHER (UNIVERSITE CATHOLIQUE DE LOUVAIN, Center for Operations Research and Econometrics (CORE));
Benteng, ZOU (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)) |
| Abstract: |
In this article we extend the recent literature on overlapping generations and
pollution by allowing each generation’s utility to depend on past levels of
pollution. To conform with the literature on habit in consumption we call this
extension habit in pollution. Habit in pollution can visualize itself as
either a concern for the flow of pollution only, or for the stock, or anything
in between. We show that habit in pollution has not only significant
consequences for the level of pollution and capital, but also for the
evolution of utility over time. We observe that habit in pollution can lead to
violations of two standard criteria of sustainability, which suggests that
habit in pollution can be another source of intergenerational inequity. |
| JEL: |
Q20 I31 |
| Date: |
2006–12–31 |
| URL: |
http://d.repec.org/n?u=RePEc:ctl:louvec:2006004&r=res |