Environmental pollution is a highly charged political and emotional issue. Debates on the extent, causes and solutions of environmental pollution have led to considerable interest in understanding the role economics plays in both the spread and control of environmental pollution.
Dr. Herb Kunze works with students and collaborators to develop mathematical models to investigate the connection between taxation, capital and pollution after a report by the International Monetary Fund discussed the role of taxation in controlling pollution.
The focus of this research is to solve a control problem: how can taxation levels hold capital above a certain threshold while pollution is kept below another threshold? How do you maintain a high standard of living while also limiting industry to a tolerable level of pollution?
While most work in this field assumes that taxation, wealth and pollution are identical over all physical locations, Dr. Kunze and his colleagues have included dynamics that take into account differing levels of wealth and pollution in different locations. This extra level of complexity makes the analysis far more realistic and far more interesting. This work is ongoing with aims to suggest politically and economically viable paths to pollution reduction.
