Dynamics Emission for a Polluting Industry

This paper develops a dynamic theoretical model for a polluting industry to determine the emission dynamics, internalizing damage cost function along with production cost function, considering emission factor. It turns out that the competitive output price is composed of not only marginal production cost function but also marginal damage cost of emitting one emission unit multiplied by emission factor as well as the term indicated the pollution stock effects on the difference between damage cost function and the time derivative of implicit pollution price. Natural reductions in pollution as a proportion of decay factor lead to a fluctuations in the time paths of emission and its concentration, so that increasing marginal damage cost that it follows to strengthen social health and human welfare.