Variable Input u i ( j,t) Fixed input x i ( j,t) Technology i=1,2. Microunit (asset quality j ) Variable Input u i ( j ’,t) Technology i=1,2. conserva tion effort WasteOutput Waste Pollution Stock s(t) Abatement (t) Environmental damage abatement effort Figure 1: scheme of the pollution and abatement processes Fixed input x i ( j ’,t)... Production process Microunit (asset quality j ’)
Figure 2: optimal technology choice when it’s optimal to diversify the land-use.
Figure 3: optimal technology choice when it is not optimal to diversify the land-use.
Figure 4: optimal technology choice. The modern technology is more profitable
= 0 s Figure 5: The phase diagram in the (s, ) space, where the stable path is upward slopping ss
= 0 s Figure 6: The phase diagram in the (s, ) space where the stable path is downward sloping ss
t 0 * ’ * Figure 7: Optimal Intertemporal Restoration Policy. * u 0 u u’ * t * * u 0 u * t * * u1()u1()u2()u2() z z’ * t * * z0z0
t 0 * ’ * Figure 8: Optimal Intertemporal Restoration Policy. * u’ u u0u0 * t * * t u1()u1() u2()u2() z z0z0 * t * * z’ u’ u u0u0 * * *
= 0 s = 0 social Figure 9: Comparison between the private and social equilibrium when the stable path is upward slopping s social = 0 private s private
= 0 s = 0 social s socials private = 0 private Figure 10: Comparison between the private and social equilibrium when the stable path is downward slopping