Pollution, Mortality and Optimal Environmental Policy

摘要: We study pollution, mortality and growth in an overlapping generations economy with uncertain lifetimes. Economic activity creates pollution: the stock of pollution has a negative effect on life expectancy while higher income (proxying either for better nutrition immunity or availability public health) prophylactic mortality. These counteracting effects can make growth-survival relationship non-concave lead to multiple steady states poverty trap. An increase exogenous abatement taxes basin dynamically consistent sequence secondbest taxes. The optimal tax is shown be non-homogeneous increasing function current capital zero low levels capital. feedback from policy independent source non-linearities leading non-existence multiplicity states, as well oscillations around some when there are none under