Gilles Rotillon

Disutility of pollution and endogenous growth

Endogenous growth is generally built on a positive externality hypothesis which is the opposite of a negative externality caused by pollution. We study a linear technology with simple assumption: an aggregate capital stock which represents a learning by doing effect and a pollution flow proportional to production. In this framework, we analyse the precise effects on growth of the disutility of pollution and its interaction with the utility of consumption in an economy without abatement technology. The decentralized equilibrium always leads to unlimited growth, but optimal growth is often limited (the negative effect of pollution dominating the positive effect of learning by doing). In this case, the optimal policy which leads the decentralized economy to follow the optimal growth path is to tax capital; in contrast with the optimal subsidy policy in an economy without pollution. When an abatement technology is introduced, the optimal solution can lead the economy to unlimited growth, whatever the form of the utility function.

International bargaining in the presence of global environmental change

This model deals with the greenhouse effect, that is to say with a problem of international pollution. Through a description of the bargaining process, it aims to determine the different forms that may be taken by cooperation agreements between the countries involved. We demonstrate, in particular, that under some conditions it is always possible for the countries to reach an agreement. Such agreements are the work of a group of so-called ‘leader countries’ characterized by their commitment in favour of cooperation. These leader countries use transfers to induce other countries to join them, but they can be insufficiently attractive to convince all the countries to cooperate. So as we show in the discussion, the cooperation is not necessarily total. Therefore, the key of a common problem can be a partial cooperation and not necessarily a common cooperation.

Equilibrium with a market of permits

In this paper we present the main results of three original studies on the equilibrium with a market of tradeable permits in a static framework. In first study, we have considered an international equilibrium of two countries which depend on the quantity of permits to each country. The allocation is efficient if and only if it is proportional to efficient labor. A redistribution in favor of the less developed country implies a redistribution to this country but leads to a dilemma with efficiency. In the second study, we analyze the consequences of the choice between giving free permits to firms and other possibilities. We show that for equalizing incomes of production factors with there marginal productivities, each factor should receive a quantity of free permits proportional to its contribution to production. In the third study, we consider the partial equilibrium of an industry where each firm is characterized by a parameter combining production efficiency and pollution effect. We define a theoretical indicator of environmental efficiency and we analyze its properties.

Bioeconomic Management of Red Swamp Crayfish (Procambarus clarkii) in the Presence of Environmental Externalities

Red swamp crayfish (Procambarus Clarkii) is a valuable renewable resource which creates significant negative externalities to its environment. Crayfish can cause severe crop damage by burrowing in fields and using irrigation systems to spread. These crayfish are resistant to normal dosages of pesticides which are harmful to fish and birds, can endure months of dryness, and live in a low oxygen environment. This paper presents a simple bioeconomic model for optimal use of the red swamp crayfish accounting for its value in consumption, adapting Plourdes (1970) model to include the negative externalities.

Lois de conservation économiques et développement durable.

In the economic literature, sustainability is often defined as the requirement of keeping something constant, or at least non-decreasing, along time (for example, consumption or utility). In this paper, we wonder under which conditions invariant quantities can be found along the optimal paths defined by the classical representation of an economy with an exhaustible resource. We use the Noether theorem to determine the conservation laws of dynamic systems. We examine under which conditions such invariants exist and how they can be interpreted as sustainability indicators.

Firms Characteristic and Equilibrium with Tradeable Permits Market

We study, in a simple model, the partial equilibrium of an industry with n firms endowed by different Cobb-Douglas technologies which have different pollution effects. The price of input (labour) and the demand curve to the industry are given. Pollution is restricted by a tradeable market of permits in the industry. Each firm is characterised by a parameter combining production efficiency and pollution effect, its e-characteristic. The equilibrium depends mainly on these e-characteristics which are linked to the performance of the technologies. In the long run performances are defined per unit of capital. Last, we analyse the consequences of permits allocations on the profitability of the firms.