Principal-agent approach to environmental improvements policies

• Autorzy: Wojciech Szatzschneider , Teresa Kwiatkowska
• Języki publikacji: EN

Abstrakty

EN

Successful solution to any environmental problem implies working with Knightian uncertainty that explicitly deals with decision making under conditions of unstructured randomness. A 'wild' type of randomness that we will never discern due to its unstable properties makes the assignment of corresponding probabilities impossible. For that reason, the consideration of general economical factors within cost/benefit analysis must fail. So, instead of governmental intervention and a cup and trade scheme, we propose a direct financial market of certificates on environmental improvements. The approach is based on the Principal-Agent method. In this study we analyze the problem of one agent only, and take as example deforestation issues. In the analytical part we give examples how these certificates could be defined. We solve some optimization problems in well established stochastic models. The approximate knowledge which actions are environmentally friendly allows us to design good environmental certificates.

Kategorie tematyczne

• 62P12: Applications to environmental and related topics
• 65K10: Optimization and variational techniques
• 60J60: Diffusion processes

• Wydawca: Institute of Mathematics Polish Academy of Sciences
• Czasopismo: Banach Center Publications
• Rocznik: 2010
• Tom: 90
• Numer: 1
• Strony: 193-201

Daty

wydano

2010

Twórcy

autor

Wojciech Szatzschneider

• Actuarial Sciences School, Universidad Anáhuac México Norte, Av. U. Anáhuac, Col. Lomas Anáhuac, México

autor

Teresa Kwiatkowska

• Philosophy Department, U. Autónoma Metropolitana-Iztapalapa, San Rafael Atlixco 186, Col. Vicentina, México

Identyfikatory

DOI

10.4064/bc90-0-13