Public evaluation of large projects : variational inequialities, bilevel programming and complementarity. A survey

Large projects evaluation rises well known difficulties because -by definition- they modify the current price system; their public evaluation presents additional difficulties because they modify too existing shadow prices without the project. This paper analyzes -first- the basic methodologies applied until late 80s., based on the integration of projects in optimization models or, alternatively, based on iterative procedures with information exchange between two organizational levels. New methodologies applied afterwards are based on variational inequalities, bilevel programming and linear or nonlinear complementarity. Their foundations and different applications related with project evaluation are explored. As a matter of fact, these new tools are closely related among them and can treat more complex cases involving -for example- the reaction of agents to policies or the existence of multiple agents in an environment characterized by common functions representing demands or constraints on polluting emissions

Marketable pollution permits in oligopolistic markets with transaction costs

In this paper, we present a variational inequality framework for the modeling, qualitative analysis, and computation of equilibrium patterns in multiproduct, multipollutant oligopolistic markets with marketable pollution permits in the presence of transaction costs. The model deals explicitly with spatial differentiation and also guarantees that the imposed environmental quality standards are met through the initial allocation of licenses. An algorithm is proposed, with convergence results, to compute the profit-maximized quantities of the oligopolistic firms\u27 products and the quantities of emissions, along with the equilibrium allocation of licenses and their prices. Numerical examples are included to illustrate this approach

Stochastic optimization of non-point source pollution abatement for the Eucha-Spavinaw watershed

Scope and Method of Study: This study develops and applies a comprehensive decision-support tool, an integrated biophysical-hydrologic - economic watershed model to determine the least cost mix, location, and magnitude of grazing management practices to meet various phosphorus TMDLs for the Eucha-Spavinaw watershed in Oklahoma within specified margins of safety. The GIS - based Soil Water Assessment Tool (SWAT) was calibrated and used to estimate sediment and nutrient loading under alternative management practices comprising of different combinations of litter application rates, commercial nitrogen, maintaining minimum biomass during grazing, and stocking densities. SWAT -generated site-specific coefficients were used in a Target MOTAD programming model to select a management practice for each site in the watershed.Findings and Conclusions: Results indicate there is no single management practice that dominates in all parts of the watershed and that optimal poultry litter application rates can vary from one soil type to another within the watershed. That is a mix of management practices applied at different locations in the watershed are required to achieve any level of phosphorus abatement from the watershed at least cost. This implies that it may be more cost effective to develop phosphorus reduction programs that target specific soil types within the watershed rather than continue with the current uniform policy of limiting litter application rates strictly by soil test phosphorus. Complete elimination of all fertilizer was found to actually increase total phosphorus loss on some soils because of increased erosion and sediment bound phosphorus. Large increases in the use of commercial nitrogen to replace poultry litter and reduce phosphorus runoff do increase nitrogen loss. As either average annual limit on nutrient loss or the average deviations above the limit are reduced more of the litter is converted to energy or hauled from the watershed. The litter-to-energy plant does not appear profitable on its own merit but becomes a more cost effective method of reducing both the level and the variability of phosphorus runoff as pollution limits are reduced