2014
DOI: 10.3182/20140824-6-za-1003.01474
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Optimal Control for Sustainable Consumption of Natural Resources

Abstract: In this paper we study optimal policies for a central planner interested in maximizing utility in an economy driven by a renewable resource. It is shown that the optimal consumption path is sustainable only when the intrinsic growth rate of the resource is greater than the social discount rate. The model is formulated as an infinite horizon optimal control problem. We deal with the mathematical details of the problem, develop a precise notion for optimality and establish the existence of optimal control at lea… Show more

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Cited by 6 publications
(5 citation statements)
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“…The closed-loop system (9) however predicts the behavior of the consumers if they act rationally according to the game defined in Section III. As mentioned in Section I, this highlights the relevance of game theory to distributed control problems, whereby the selected payoffs and learning scheme may be treated as design principles in the bigger problem of social control [11], [20] in order to obtain desired behavior. Indeed as we find here, the selected scheme eliminates the phenomenon of free-riding, which poses a significant challenge in the effective governance of natural resources [17].…”
Section: Simulation Results: Overcoming Free-riding Behaviormentioning
confidence: 95%
“…The closed-loop system (9) however predicts the behavior of the consumers if they act rationally according to the game defined in Section III. As mentioned in Section I, this highlights the relevance of game theory to distributed control problems, whereby the selected payoffs and learning scheme may be treated as design principles in the bigger problem of social control [11], [20] in order to obtain desired behavior. Indeed as we find here, the selected scheme eliminates the phenomenon of free-riding, which poses a significant challenge in the effective governance of natural resources [17].…”
Section: Simulation Results: Overcoming Free-riding Behaviormentioning
confidence: 95%
“…Sustainable Development Goals [36] (SDG) have been proposed by the United Nations (UN) to describe several sustainability criteria in form of goals, tasks, and scenarios. Environment and society related sustainability goals can be broken down to numerous constraints and objectives [28,7] that affect everyday decisions, such reduction of CO 2 emission with everyday activities. Making an optimal decision with respect to such constraints and objectives often introduces potential trade-offs, e.g.…”
Section: Introductionmentioning
confidence: 99%
“…Although the effect of sustainable recommendations on individual purchases is often observed [30,2,5], there is little quantitative analysis on the collective impact of more sustainable decisions on emissions, pollution, resource usage, and personal values. Existing analytical models that often estimate such impact do not deal or represent real-world data on individual/microscopic level, but rather consists mostly of theoretical economical and climate models that evaluate sustainability on a macroscopic or societal level [28,35]. A welfare objective function that includes analytical terms representing satisfaction from consumption and environmental pollution is often optimized [31,35].…”
Section: Introductionmentioning
confidence: 99%
“…However, asymptotic outcomes are not considered in this static one-shot game. In a recent work [17], an infinite horizon optimal control framework was applied to a dynamical model 1 to identify conditions under which an optimal prescribed consumption rate ensures resource sustainability. However, the consumption rate is not directly manipulated by taxing, pricing, or other social control policies.…”
Section: Introductionmentioning
confidence: 99%