Optimal Soil Management and Environmental Policy

This paper studies the effects of environmental policy on the farmer’s soil optimal management. We consider a dynamic economic model of soil erosion where the intensity use of inputs allows the farmer to control soil losses. Therefore, inputs use induces a pollution which is accentuated by the soil fragility. We show, at the steady state, that the environmental tax induces a more conservative farmer behavior for soil, but in some cases it can exacerbate pollution. These effects can be moderated when farmers introduce abatement activity.Soil erosion, Pollution, Environmental policy, Optimal soil conservation, Abatement activities

Climate Change Mitigation Options and Directed Technical Change: A Decentralized Equilibrium Analysis

The paper considers a climate change growth model with three R&D sectors dedicated to energy, backstop and CCS (Carbon Capture and Storage) efficiency. First, we characterize the set of decentralized equilibria: A particular equilibrium is associated to each vector of public tools which includes a carbon tax and a subsidy to each R&D sector. Moreover, we show that it is possible to compute any equilibrium as the solution of a maximization program. Second, we solve the first-best optimum problem and we implement it by computing the vector of optimal tools. Finally, we illustrate the theoretical model using some calibrated functional specifications. In particular, we investigate the effects of various combinations of public policies (including the optimal ones) by determining the deviation of each corresponding equilibrium from the "laisser-faire" benchmark.climate change, energy, CCS, directed technical change, carbon tax, R&D subsidies