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The paper presents an attempt to analyze an impact of introducing the emission norms and trade in permits for the greenhouse gas emissions (implementation of the Kyoto protocols) on the economic growth in a small economy (illustrated on the case of Polish economy). The endogenization of the environmental costs causes extra charges or benefits related to the trade in the emission permits. In order to analyze the impact of the imposed regulations on the economic growth a one sector optimization model has been developed. The finite horizon optimization problem is considered. The zero end-point constraints on the net import and foreign debt have been adopted. The optimal solution consists of the optimal choice between the competing technologies, and investing the revenues gained at the beginning of the permit trading. Two simulation scenarios were performed, which differed in the level of permit prices, used as the model parameters.
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Projects co-financed by:
Operational Program Digital Poland, 2014-2020, Measure 2.3: Digital accessibility and usefulness of public sector information; funds from the European Regional Development Fund and national co-financing from the state budget.