Advanced Search
MyIDEAS: Login

The environment as a factor of production

Contents:

Author Info

  • Considine, Timothy J.
  • Larson, Donald F.

Abstract

The authors develop a model of environmental resource use in production with an empirical analysis of how electric power companies consume and bank sulfur dioxide pollution permits. The model considers emissions, fuels, and labor as variable inputs with quasi-fixed inputs of permits and capital. Incorporating information from permit markets allows the authors to distinguish between user costs and asset shadow values. Their findings indicate that firms are holding stocks of pollution permits for reasons other than short-term cost savings. The results also reveal substantial substitution possibilities between emissions, permits stocks, and other factors of production. The authors speculate that anticipated secondary markets for carbon-offset inventories related to the flexibility mechanisms of the Kyoto Protocol will have similar effects for greenhouse-gas emitting firms.

(This abstract was borrowed from another version of this item.)

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www.sciencedirect.com/science/article/B6WJ6-4KV3XJY-1/2/12f35d95ddc61d1fa91d8ecf04f74016
Download Restriction: Full text for ScienceDirect subscribers only

As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 52 (2006)
Issue (Month): 3 (November)
Pages: 645-662

as in new window
Handle: RePEc:eee:jeeman:v:52:y:2006:i:3:p:645-662

Contact details of provider:
Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords:

Other versions of this item:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Shea, John, 1993. "The Input-Output Approach to Instrument Selection," Journal of Business & Economic Statistics, American Statistical Association, vol. 11(2), pages 145-55, April.
  2. Anonymous, 1999. "End Materials," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(01), April.
  3. Curtis Carlson & Dallas Burtraw & Maureen Cropper & Karen L. Palmer, 2000. "Sulfur Dioxide Control by Electric Utilities: What Are the Gains from Trade?," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1292-1326, December.
  4. Anonymous, 1999. "Front Materials," Choices, Agricultural and Applied Economics Association, vol. 14(3).
  5. Stavins, Robert N., 2004. "Environmental Economics," Working paper 276, Regulation2point0.
  6. Caves, Douglas W & Christensen, Laurits R, 1980. "Global Properties of Flexible Functional Forms," American Economic Review, American Economic Association, vol. 70(3), pages 422-32, June.
  7. Kling, Catherine & Rubin, Jonathan, 1997. "Bankable permits for the control of environmental pollution," Journal of Public Economics, Elsevier, vol. 64(1), pages 101-115, April.
  8. Anonymous, 1999. "End Materials," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(01), July.
  9. Tietenberg, T H, 1990. "Economic Instruments for Environmental Regulation," Oxford Review of Economic Policy, Oxford University Press, vol. 6(1), pages 17-33, Spring.
  10. Pindyck, Robert S & Rotemberg, Julio J, 1983. "Dynamic Factor Demands and the Effects of Energy Price Shocks," American Economic Review, American Economic Association, vol. 73(5), pages 1066-79, December.
  11. Anonymous, 1999. "End Materials," Journal of Food Distribution Research, Food Distribution Research Society, vol. 30(3), November.
  12. Anonymous, 1999. "Front Materials," Choices, Agricultural and Applied Economics Association, vol. 14(4).
  13. Anonymous, 1999. "Front Materials," Choices, Agricultural and Applied Economics Association, vol. 14(2).
  14. Anonymous, 1999. "End Materials," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(1), April.
  15. Anonymous, 1999. "Front Materials," Choices, Agricultural and Applied Economics Association, vol. 14(1).
  16. Morrison, Catherine J, 1988. "Quasi-Fixed Inputs in U.S. and Japanese Manufacturing: A Generalized Leontief Restricted Cost Function Approach," The Review of Economics and Statistics, MIT Press, vol. 70(2), pages 275-87, May.
  17. Anonymous, 1999. "End Materials," Agricultural and Resource Economics Review, Northeastern Agricultural and Resource Economics Association, vol. 28(2), October.
  18. Ellerman, A. Denny & Montero, Juan-Pablo, 1998. "The Declining Trend in Sulfur Dioxide Emissions: Implications for Allowance Prices," Journal of Environmental Economics and Management, Elsevier, vol. 36(1), pages 26-45, July.
  19. Rubin, Jonathan D. & Kling, Catherine, 1993. "An Emission Saved is an Emission Earned: An Empirical Study of Emission Banking for Light-Duty Vehicle Manufacturers," University of California Transportation Center, Working Papers qt3rb1472g, University of California Transportation Center.
  20. Joskow, Paul L & Schmalensee, Richard, 1998. "The Political Economy of Market-Based Environmental Policy: The U.S. Acid Rain Program," Journal of Law and Economics, University of Chicago Press, vol. 41(1), pages 37-83, April.
  21. Ayres, Robert U & Kneese, Allen V, 1969. "Production , Consumption, and Externalities," American Economic Review, American Economic Association, vol. 59(3), pages 282-97, June.
  22. Schennach, Susanne M., 2000. "The Economics of Pollution Permit Banking in the Context of Title IV of the 1990 Clean Air Act Amendments," Journal of Environmental Economics and Management, Elsevier, vol. 40(3), pages 189-210, November.
  23. Rubin, Jonathan D., 1996. "A Model of Intertemporal Emission Trading, Banking, and Borrowing," Journal of Environmental Economics and Management, Elsevier, vol. 31(3), pages 269-286, November.
  24. Richard Schmalensee & Paul L. Joskow & A. Denny Ellerman & Juan Pablo Montero & Elizabeth M. Bailey, 1998. "An Interim Evaluation of Sulfur Dioxide Emissions Trading," Journal of Economic Perspectives, American Economic Association, vol. 12(3), pages 53-68, Summer.
  25. Ramey, Valerie A, 1989. "Inventories as Factors of Production and Economic Fluctuations," American Economic Review, American Economic Association, vol. 79(3), pages 338-54, June.
  26. Burtraw, Dallas & Lile, Ron, 1998. "State-Level Policies and Regulatory Guidance for Compliance in the Early Years of the SO2 Emission Allowance Trading Program," Discussion Papers dp-98-35, Resources For the Future.
  27. Christensen, Laurits R & Greene, William H, 1976. "Economies of Scale in U.S. Electric Power Generation," Journal of Political Economy, University of Chicago Press, vol. 84(4), pages 655-76, August.
  28. Mundlak, Yair, 1996. "Production Function Estimation: Reviving the Primal," Econometrica, Econometric Society, vol. 64(2), pages 431-38, March.
  29. Anonymous, 1999. "End Materials," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(03), December.
  30. Arimura, Toshi H., 2002. "An Empirical Study of the SO2 Allowance Market: Effects of PUC Regulations," Journal of Environmental Economics and Management, Elsevier, vol. 44(2), pages 271-289, September.
  31. Cronshaw, Mark B & Brown-Kruse, Jamie, 1996. "Regulated Firms in Pollution Permit Markets with Banking," Journal of Regulatory Economics, Springer, vol. 9(2), pages 179-89, March.
  32. Anonymous, 1999. "End Materials," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 31(02), August.
  33. Anonymous, 1999. "End Materials," Journal of Agricultural and Resource Economics, Western Agricultural Economics Association, vol. 24(02), December.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. Kumar, Surender & Managi, Shunsuke, 2010. "Sulfur dioxide allowances: Trading and technological progress," Ecological Economics, Elsevier, vol. 69(3), pages 623-631, January.
  2. Anastasios Xepapadeas & E. Tzouvelekas & D. Vouvaki, 2007. "Total Factor Productivity Growth and the Environment: A Case for Green Growth Accounting," Working Papers 2007.38, Fondazione Eni Enrico Mattei.
  3. Considine , Timothy J. & Larson, Donald F., 2009. "Substitution and technological change under carbon cap and trade : lessons from Europe," Policy Research Working Paper Series 4957, The World Bank.
  4. Førsund, Finn R., 2008. "Good Modelling of Bad Outputs: Pollution and Multiple-Output Production," Memorandum 30/2008, Oslo University, Department of Economics.
  5. Knut Einar Rosendahl, 2007. "Incentives and quota prices in an emission trading scheme with updating," Discussion Papers 495, Research Department of Statistics Norway.
  6. Knut Rosendahl & Halvor Storrøsten, 2011. "Emissions Trading with Updated Allocation: Effects on Entry/Exit and Distribution," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 49(2), pages 243-261, June.
  7. Tran, Ngoc Bich & Ley, Eduardo, 2012. "Green prices," Policy Research Working Paper Series 6131, The World Bank.
  8. Honma, Satoshi, 2012. "Environmental and economic efficiencies in the Asia-Pacific region," MPRA Paper 43361, University Library of Munich, Germany.
  9. Olivier Rousse & Benoît Sévi, 2005. "Behavioral Heterogeneity in the US Sulfur Dioxide Emissions Allowance Trading Program," ERSA conference papers ersa05p550, European Regional Science Association.
  10. Don Fullerton & Garth Heutel, 2010. "The General Equilibrium Incidence of Environmental Mandates," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 64-89, August.
  11. Larson, Donald F. & Ambrosi, Philippe & Dinar, Ariel & Rahman, Shaikh Mahfuzur & Entler, Rebecca, 2008. "Carbon markets, institutions, policies, and research," Policy Research Working Paper Series 4761, The World Bank.
  12. Mekaroonreung, Maethee & Johnson, Andrew L., 2012. "Estimating the shadow prices of SO2 and NOx for U.S. coal power plants: A convex nonparametric least squares approach," Energy Economics, Elsevier, vol. 34(3), pages 723-732.
  13. Ramón López & Sang Won Yoon, 2013. "Sustainable Economic Growth: Structural Transformation with Consumption Flexibility," Working Papers wp375, University of Chile, Department of Economics.
  14. Shiyi Chen, 2009. "Engine or drag: Can high energy consumption and CO 2 emission drive the sustainable development of Chinese industry?," Frontiers of Economics in China, Springer, vol. 4(4), pages 548-571, December.
  15. Ian Bateman & Georgina Mace & Carlo Fezzi & Giles Atkinson & Kerry Turner, 2011. "Economic Analysis for Ecosystem Service Assessments," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 48(2), pages 177-218, February.
  16. repec:mop:credwp:06.02.63 is not listed on IDEAS
  17. Jerry Courvisanos, 2009. "Regional Innovation for Sustainable Development: An Australian Perspective," Journal of Innovation Economics, De Boeck Université, vol. 0(1), pages 119-143.
  18. Juana AZNAR-MARQUEZ & Jose-Ramon RUIZ-TAMARIT, 2012. "Sufficient and Necessary Conditions for Non-Catastrophic Growth," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2012027, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:eee:jeeman:v:52:y:2006:i:3:p:645-662

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Wendy Shamier).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.