Consider a pollution problem with two sources and two recipient regions. Abatement cost functions are given by C_j(e_j)=(a_j−b_je_j)²/2b_j for j=1,2. The diffusion matrix is given by:

and the damage function for receptor m is D_m (A_m)=d_mA²_m/2.

(a) Determine how many permits must be issued for each region.

(b) Consider the special case where h₁₂=h₂₂=0 and interpret.

Transcribed Image Text:

H = (M M2) h1 M