The Conflict Between Consumption and Pollution

Our society is concerned about controlling pollution without excessive depression of consumption. In this correspondence a which, in conjunction with a utility function, determines the manner in which consumption should vary with time so as to maximize utility. It is assumed that a specified pollution level is to be achieved at the termination of a given planning period, and the problem is to obtain the optimum path to this objective. As a special case, a steady-state solution is obtained, which specifies the most desirable constant levels of consumption and pollution. Critical parameters that enter into this solution are the discount (or appreciation) rate for the future, the decay lifetime for the pollutant, and the rate of change of pollution generation with respect to consumption. In addition, a closed-form solution is obtained for the low-pollution case. which indicates that the optimum consumption function decreases with increasing time, Computer solutions are given for the general case with several different values of critical parameters.