Abstract:

As announced in our previous works, this paper is part of a larger research that deals with sustainable development and environment protection in extractive industry. As such, the next papers will deal with issues related to environmental pollution. In this respect, this paper is aiming to identify how much pollution there should be depending on the objective that is being sought. While many economists regard economic optimality as the ideal objective, this requires that resources should be allocated so as to maximise social welfare, and associated with that allocation will be the optimal level of pollution. In the beginning we shall deal with the concept of a pollution target, and that alternative policy objectives usually imply different pollution targets. Then we shall move on by explaining the difference between flow and stock pollutants. As a result, in the end, to conclude on this part of analysis, a simple static model – one in which time plays no role – will be given to identify the efficient level of a flow pollutant, as in this model, emissions have both benefits and costs.