Pollution, unequal lifetimes and fairness

Abstract : This paper characterizes the optimal level of pollution in a two-period OLG economy where pollution deteriorates survival conditions. We compare two long-run social optima: on the one hand, the average utilitarian optimum, where the long-run average well-being is maximized, and, on the other hand, the ex post egalitarian optimum, where the realized well-being of the worst-off at the stationary equilibrium is maximized. It is shown that the ex post egalitarian optimum involves, under weak conditions, a higher level of pollution in comparison with the utilitarian optimum. This result is robust to introducing health expenditures in the survival function. Finally, we examine the decentralization of those two social optima, and we compare the associated optimal taxes on capital income aimed at internalizing the pollution externality.
Keywords : pollution
Type de document :
Article dans une revue
Mathematical Social Sciences, Elsevier, 2016, 82, pp.49-64. <10.1016/j.mathsocsci.2016.04.004>
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Soumis le : mardi 18 avril 2017 - 12:41:28
Dernière modification le : mardi 6 juin 2017 - 11:35:08

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Grégory Ponthière. Pollution, unequal lifetimes and fairness. Mathematical Social Sciences, Elsevier, 2016, 82, pp.49-64. <10.1016/j.mathsocsci.2016.04.004>. <halshs-01509676>

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