We explore the idea of regime switching as a new methodological approach in the analysis of the emission-income relationship. We formalize the idea by using a simple static model of profit maximization where above a threshold income level a more stringent environmental policy could induce a...

Optimal portfolio rules are derived under uncertainty aversion by formulating the portfolio choice problem as a robust control problem. Using a constant relative risk aversion (CRRA) utility function, we present the solution of the robust portfolio choice problem in the cases of one and two...

Climate change is one of the most urgent and severe problems on the international agenda and one of the basic factors that determine sustainability conditions. This paper attempts to reveal the connection between productive base sustainability for two large groups of countries, developed and...

Since surface water flows are often stochastic, there is a role for water reservoirs in protecting users against uncertainty. We assume uncertainty regarding the probability distribution for the stochastic variable. Thus the decision allows for a range of approximate models that could be true,...

Ecological systems such as shallow lakes areusually non-linear and display discontinuitiesand hysteresis in their behaviour. Thesesystems often also provide conflicting servicesas a resource and a waste sink. This impliesthat the economic analysis of these systemsrequires to solve a non-standard...

In nonpoint source pollution problems, the regulator does not observe each polluter’s individual emission, which prevents him from using the conventional policy instruments. Therefore, new instruments have been designed to regulate this type of pollution. In an experiment, we compare the...