The Economics of Controlling Stock Pollutants: An Efficient Strategy for Greenhouse Gases

Optimal control theory is applied to develop an efficient strategy to control stock pollutants such as greenhouse gases and hazardous waste. The optimal strategy suggests that, at any time, the marginal costs of abatement should be equated with the present value of the marginal damage of timely unabated emission. The optimal strategy calls for increasingly light abatement over time as the pollutant stock accumulates. The optimal policy applied to greenhouse gases suggests moderate abatement efforts, at present, with the potential for much greater future efforts.