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

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http://hdl.handle.net/10138/302028

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Lappi , P A & Ollikainen , M M O 2019 , ' Optimal Environmental Policy for a Mine Under Polluting Waste Rocks and Stock Pollution ' , Environmental and Resource Economics , vol. 73 , no. 1 , pp. 133-158 . https://doi.org/10.1007/s10640-018-0253-9

Title: Optimal Environmental Policy for a Mine Under Polluting Waste Rocks and Stock Pollution
Author: Lappi, Pauli Antero; Ollikainen, Markku Martti Olavi
Contributor: University of Helsinki, Department of Economics and Management
University of Helsinki, Markku Ollikainen / Principal Investigator
Date: 2019-05
Language: eng
Number of pages: 26
Belongs to series: Environmental and Resource Economics
ISSN: 0924-6460
URI: http://hdl.handle.net/10138/302028
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.
Subject: 1172 Environmental sciences
511 Economics
Emission taxation
Exhaustible resources
Mining
Optimal control
Stock pollution
Waste rock
Q30
Q38
Q50
Q58
OPTIMAL TIME PATH
OPTIMAL ABATEMENT
FOSSIL-FUELS
EXTRACTION
CAPACITY
CHOICE
GRADE
ORDER
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