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| In this paper we consider the problem of the optimal pollution emission price in a continuous-time context and give a formulation as a bilevel programming problem. In particular, we suppose that control policies are imposed to the end of regulating the pollution emissions at supply markets. Therefore, the policy-maker chooses the optimal price of the pollution emission with consideration to manufacturers' response to the price. On the other hand, the manufacturers choose the optimal quantities of production to maximize their profits, given the price of pollution emission. Using some new recent results on infinite dimensional variational analysis, we are able to reformulate the bilevel programming problem into a one level optimization problem by means of complementarity conditions. Moreover, the existence of solutions is investigated. Finally, a numerical example is provided. |
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