A general theoretical model is presented for the determination of optimal regional growth and pollution control levels over a multiperiod time horizon. The problem is stated as the maximization of total profits of regional firms subject to constraints of ambient environmental quality and resource scarcity for production and abatement activities. The model assumes that environmental quality is stochastic by incorporating variable factors of dilution or assimilation in the constraint set. This model is expressed as a stochastic nonlinear programming problem, which by suitable mathematical transformations is reduced to a deterministic linear programming model. Solutions to the model show the economic impacts of uniform versus efficient treatment standards, time delays on waste control enforcement, and statistical properties of the dilution factors.
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