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Determination of optimal pollution levels through multiple-criteria decision making: an application to the Spanish electricity sector.

P. Linares

An efficient pollution management requires the harmonisation of often conflicting economic and environmental aspects. A compromise has to be found, in which social welfare is maximised. The determination of this social optimum has been attempted with different tools, of which the most correct according to neo-classical economics may be the one based on the economic valuation of the externalities of pollution. However, this approach is still controversial, and few decision makers trust the results obtained enough to apply them. But a very powerful alternative exists, which avoids the problem of monetising physical impacts. Multiple-criteria decision making provides methodologies for dealing with impacts in different units, and for incorporating the preferences of decision makers or society as a whole, thus allowing for the determination of social optima under heterogeneous criteria, which is usually the case of pollution management decisions. In this paper, a compromise programming model is presented for the determination of the optimal pollution levels for the electricity industry in Spain for carbon dioxide, sulphur dioxide, nitrous oxides, and radioactive waste. The preferences of several sectors of society are incorporated explicitly into the model, so that the solution obtained represents the optimal pollution level from a social point of view. Results show that cost minimisation is still the main objective for society, but the simultaneous consideration of the rest of the criteria achieves large pollution reductions at a low cost increment.

Keywords: pollution management, multicriteria, electricity

Air Pollution '99. 27-29 Julio 1999, San Francisco (USA).

Published: July 1999.

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