IDEAS home Printed from https://ideas.repec.org/a/kap/enreec/v67y2017i1d10.1007_s10640-015-9974-1.html
   My bibliography  Save this article

Axioms of a Polluting Technology: A Materials Balance Approach

Author

Listed:
  • Kenneth Løvold Rødseth

    (Institute of Transport Economics-Norwegian Centre for Transport Research)

Abstract

This paper aims to present an economic model characterized by a set of axioms that are consistent with the laws of thermodynamics. Two new axioms—weak G-disposability (i.e., weak directional disposability) and output essentiality—are introduced to satisfy the materials balance principle and the entropy law, respectively. The axiomatic production model is compared to other well-known production models that account for the joint production of good and bad outputs to illustrate the advantages of the new modeling approach.

Suggested Citation

  • Kenneth Løvold Rødseth, 2017. "Axioms of a Polluting Technology: A Materials Balance Approach," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 67(1), pages 1-22, May.
    • Handle: RePEc:kap:enreec:v:67:y:2017:i:1:d:10.1007_s10640-015-9974-1
    DOI: 10.1007/s10640-015-9974-1
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10640-015-9974-1
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10640-015-9974-1?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Kenneth Rødseth & Eirik Romstad, 2014. "Environmental Regulations, Producer Responses, and Secondary Benefits: Carbon Dioxide Reductions Under the Acid Rain Program," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(1), pages 111-135, September.
    2. Murty, Sushama & Russell, R. Robert, 2010. "On modeling pollution-generating technologies," Economic Research Papers 271176, University of Warwick - Department of Economics.
    3. Shadbegian, Ronald J. & Gray, Wayne B., 2005. "Pollution abatement expenditures and plant-level productivity: A production function approach," Ecological Economics, Elsevier, vol. 54(2-3), pages 196-208, August.
    4. Chambers,Robert G., 1988. "Applied Production Analysis," Cambridge Books, Cambridge University Press, number 9780521314275.
    5. Baumgartner, Stefan & Dyckhoff, Harald & Faber, Malte & Proops, John & Schiller, Johannes, 2001. "The concept of joint production and ecological economics," Ecological Economics, Elsevier, vol. 36(3), pages 365-372, March.
    6. Forsund, Finn R., 2009. "Good Modelling of Bad Outputs: Pollution and Multiple-Output Production," International Review of Environmental and Resource Economics, now publishers, vol. 3(1), pages 1-38, August.
    7. Matthias Ruth, 1995. "Thermodynamic implications for natural resource extraction and technical change in U.S. copper mining," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 6(2), pages 187-206, September.
    8. Tim Coelli & Ludwig Lauwers & Guido Huylenbroeck, 2007. "Environmental efficiency measurement and the materials balance condition," Journal of Productivity Analysis, Springer, vol. 28(1), pages 3-12, October.
    9. Hampf, Benjamin, 2014. "Separating Environmental Efficiency into Production and Abatement Efficiency - A Nonparametric Model with Application to U.S. Power Plants," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 69997, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    10. Rüdiger Pethig, 2003. "The 'materials balance approach' to pollution: its origin, implications and acceptance," Volkswirtschaftliche Diskussionsbeiträge 105-03, Universität Siegen, Fakultät Wirtschaftswissenschaften, Wirtschaftsinformatik und Wirtschaftsrecht.
    11. Stefan baumgärtner, 2004. "The Inada Conditions for Material Resource Inputs Reconsidered," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 29(3), pages 307-322, November.
    12. Pethig, Rudiger, 2006. "Non-linear production, abatement, pollution and materials balance reconsidered," Journal of Environmental Economics and Management, Elsevier, vol. 51(2), pages 185-204, March.
    13. Lauwers, Ludwig, 2009. "Justifying the incorporation of the materials balance principle into frontier-based eco-efficiency models," Ecological Economics, Elsevier, vol. 68(6), pages 1605-1614, April.
    14. Hoang, Viet-Ngu & Coelli, Tim, 2011. "Measurement of agricultural total factor productivity growth incorporating environmental factors: A nutrients balance approach," Journal of Environmental Economics and Management, Elsevier, vol. 62(3), pages 462-474.
    15. Stiglitz, Joseph E., 1997. "Georgescu-Roegen versus Solow/Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 269-270, September.
    16. Roma, Antonio & Pirino, Davide, 2009. "The extraction of natural resources: The role of thermodynamic efficiency," Ecological Economics, Elsevier, vol. 68(10), pages 2594-2606, August.
    17. Krysiak, Frank C. & Krysiak, Daniela, 2003. "Production, consumption, and general equilibrium with physical constraints," Journal of Environmental Economics and Management, Elsevier, vol. 46(3), pages 513-538, November.
    18. Benjamin Hampf, 2014. "Separating environmental efficiency into production and abatement efficiency: a nonparametric model with application to US power plants," Journal of Productivity Analysis, Springer, vol. 41(3), pages 457-473, June.
    19. Ayres, Robert U & Kneese, Allen V, 1969. "Production , Consumption, and Externalities," American Economic Review, American Economic Association, vol. 59(3), pages 282-297, June.
    20. R. G. Chambers & Y. Chung & R. Färe, 1998. "Profit, Directional Distance Functions, and Nerlovian Efficiency," Journal of Optimization Theory and Applications, Springer, vol. 98(2), pages 351-364, August.
    21. Fare, Rolf & Grosskopf, Shawna & Noh, Dong-Woon & Weber, William, 2005. "Characteristics of a polluting technology: theory and practice," Journal of Econometrics, Elsevier, vol. 126(2), pages 469-492, June.
    22. Russell W. Pittman, 1981. "Issue in Pollution Control: Interplant Cost Differences and Economies of Scale," Land Economics, University of Wisconsin Press, vol. 57(1), pages 1-17.
    23. Daly, Herman E., 1997. "Georgescu-Roegen versus Solow/Stiglitz," Ecological Economics, Elsevier, vol. 22(3), pages 261-266, September.
    24. Rolf Färe & Shawna Grosskopf, 2003. "Nonparametric Productivity Analysis with Undesirable Outputs: Comment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 85(4), pages 1070-1074.
    25. Udo Ebert & Heinz Welsch, 2007. "Environmental Emissions and Production Economics: Implications of the Materials Balance," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(2), pages 287-293.
    26. Fare, Rolf & Grosskopf, Shawna & Pasurka, Carl Jr., 2007. "Pollution abatement activities and traditional productivity," Ecological Economics, Elsevier, vol. 62(3-4), pages 673-682, May.
    27. Barbera, Anthony J. & McConnell, Virginia D., 1990. "The impact of environmental regulations on industry productivity: Direct and indirect effects," Journal of Environmental Economics and Management, Elsevier, vol. 18(1), pages 50-65, January.
    28. 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.
    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


    Cited by:

    1. N. Torabi Golsefid & M. Salahi, 2023. "An SOCP approach to a two-stage network DEA with feedbacks and shared resources," OPSEARCH, Springer;Operational Research Society of India, vol. 60(3), pages 1153-1178, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Kenneth Løvold Rødseth, 2017. "Environmental regulations and allocative efficiency: application to coal-to-gas substitution in the U.S. electricity sector," Journal of Productivity Analysis, Springer, vol. 47(2), pages 129-142, April.
    2. Hampf, Benjamin & Rødseth, Kenneth Løvold, 2015. "Carbon dioxide emission standards for U.S. power plants: An efficiency analysis perspective," Energy Economics, Elsevier, vol. 50(C), pages 140-153.
    3. Rødseth, Kenneth Løvold, 2013. "Capturing the least costly way of reducing pollution: A shadow price approach," Ecological Economics, Elsevier, vol. 92(C), pages 16-24.
    4. Jeanneaux, Philippe & Latruffe, Laure, 2016. "Modelling pollution-generating technologies in performance benchmarking: Recent developments, limits and future prospects in the nonparametric frameworkAuthor-Name: Dakpo, K. Hervé," European Journal of Operational Research, Elsevier, vol. 250(2), pages 347-359.
    5. Finn R. Førsund, 2018. "Multi-equation modelling of desirable and undesirable outputs satisfying the materials balance," Empirical Economics, Springer, vol. 54(1), pages 67-99, February.
    6. Forsund, Finn R., 2009. "Good Modelling of Bad Outputs: Pollution and Multiple-Output Production," International Review of Environmental and Resource Economics, now publishers, vol. 3(1), pages 1-38, August.
    7. Kenneth Rødseth & Eirik Romstad, 2014. "Environmental Regulations, Producer Responses, and Secondary Benefits: Carbon Dioxide Reductions Under the Acid Rain Program," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 59(1), pages 111-135, September.
    8. Ke Wang & Zhifu Mi & Yi‐Ming Wei, 2019. "Will Pollution Taxes Improve Joint Ecological and Economic Efficiency of Thermal Power Industry in China?: A DEA‐Based Materials Balance Approach," Journal of Industrial Ecology, Yale University, vol. 23(2), pages 389-401, April.
    9. Hampf, Benjamin & Rødseth, Kenneth Løvold, 2019. "Environmental efficiency measurement with heterogeneous input quality: A nonparametric analysis of U.S. power plants," Energy Economics, Elsevier, vol. 81(C), pages 610-625.
    10. Benjamin Hampf & Kenneth Løvold Rødseth, 2017. "Optimal profits under environmental regulation: the benefits from emission intensity averaging," Annals of Operations Research, Springer, vol. 255(1), pages 367-390, August.
    11. Kuosmanen, Natalia & Kuosmanen, Timo, 2013. "Modeling Cumulative Effects of Nutrient Surpluses in Agriculture: A Dynamic Approach to Material Balance Accounting," Ecological Economics, Elsevier, vol. 90(C), pages 159-167.
    12. Kenneth Rødseth, 2014. "Efficiency measurement when producers control pollutants: a non-parametric approach," Journal of Productivity Analysis, Springer, vol. 42(2), pages 211-223, October.
    13. Andreas Eder, 2022. "Environmental efficiency measurement when producers control pollutants under heterogeneous conditions: a generalization of the materials balance approach," Journal of Productivity Analysis, Springer, vol. 57(2), pages 157-176, April.
    14. Andreas Eder, 2021. "Environmental efficiency measurement when producers control pollutants under heterogeneous conditions: a generalization of the materials balance approach," Working Papers 752021, University of Natural Resources and Life Sciences, Vienna, Department of Economics and Social Sciences, Institute for Sustainable Economic Development.
    15. repec:zbw:inwedp:752021 is not listed on IDEAS
    16. Rødseth, Kenneth Løvold, 2016. "Environmental efficiency measurement and the materials balance condition reconsidered," European Journal of Operational Research, Elsevier, vol. 250(1), pages 342-346.
    17. Atkinson, Scott E. & Tsionas, Mike G., 2021. "Generalized estimation of productivity with multiple bad outputs: The importance of materials balance constraints," European Journal of Operational Research, Elsevier, vol. 292(3), pages 1165-1186.
    18. Ebert, Udo & Welsch, Heinz, 2011. "Optimal environmental taxes and standards: Implications of the materials balance," Ecological Economics, Elsevier, vol. 70(12), pages 2454-2460.
    19. Lauwers, Ludwig, 2009. "Justifying the incorporation of the materials balance principle into frontier-based eco-efficiency models," Ecological Economics, Elsevier, vol. 68(6), pages 1605-1614, April.
    20. Hampf, Benjamin, 2018. "Cost and environmental efficiency of U.S. electricity generation: Accounting for heterogeneous inputs and transportation costs," Energy, Elsevier, vol. 163(C), pages 932-941.
    21. Dakpo, K Hervé, 2016. "On modeling pollution-generating technologies: a new formulation of the by-production approach," Working Papers 245191, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).

    More about this item

    Keywords

    Axiomatic production model; Materials balance principle; Weak G-disposability; Essentiality; Environmental efficiency;
    All these keywords.

    JEL classification:

    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q57 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Ecological Economics

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:67:y:2017:i:1:d:10.1007_s10640-015-9974-1. See general information about how to correct material in RePEc.

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

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

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.