This paper deals with a model of pollution accumulation in which a catastrophic environmental event occurs once the pollution stock exceeds some uncertain critical level. This problem is studied in a context of "hard uncertainty" since we consider that the available knowledge concerning the value taken by the critical pollution threshold contains both randomness and imprecision. Such a general form of knowledge is modelled as a (closed) random interval. This approach is mathematically tractable and amenable to numerical simulations. In this framework we investigate the effect of hard uncertainty on the optimal pollution/consumption trade-off and we compare the results with those obtained both in the certainty case and in the case of "soft uncertainty" (where only randomness prevails).
Keywords. optimal pollution control, environmental risk, belief functions, random intervals, representation of uncertainty
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ERASME - Laboratoire d'Economie