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We consider a model of polluting firms subject to tax on emissions, monitoring, and penalties in case of underreporting and which face a choice between a more expensive clean and a less expensive dirty technology. Moreover, emissions are subject to random events.We show that the optimal...
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We develop a simple model of managing a system subject to pollution damage under risk of an abrupt and random jump in …. -- environmental pollution ; optimal management ; catastrophic transitions ; uncertainty ; adaptation ; mitigation …
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