We study an optimal AK-like model of capital accumulation and growth in the presence of a negative environmental externality in the tradition of Stokey (1998). Both production and consumption activities generate polluting waste. The economy exerts a recycling effort to reduce the stock of waste. Recycling also generates income, which is fully devoted to capital accumulation. The whole problem amounts to choosing the optimal control paths for consumption and recycling to maximize a social welfare function that notably includes the waste stock and disutility from the recycling effort.
BOUCEKKINE, R. and EL OUARDIGHI, F. (2016). Optimal Growth with Polluting Waste and Recycling. In: Dynamic Perspectives on Managerial Decision Making: Essays in Honor of Richard F. Hartl. 1st ed. Springer, pp. 109-126.