Conflicts between optimality and sustainability are typical in the literature on sustainable development. Using the “capital-resource” growth model, Pezzey and Withagen (1998, Scandinavian Journal of Economics <Emphasis Type="Bold">100 (2), 513–527) have proved that if natural resources are exhaustible, the...</emphasis>

A model of a renewable resource is developed where the growth and quality of the resource are reduced by pollution. Ambient pollution concentrations and the renewable resource stock are modeled as stochastic processes. Conditions for the optimal harvest plan and the optimal emissions rate are...