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Environmental performance and equilibrium

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Author Info
BRECHET, Thierry
MICHEL, Philippe

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Abstract

Firms' or industries' ranking in terms of environmental performance may be influenced by equilibrium and not only by ex ante technological characteristics. We adopt a natural definition of relative eco-efficiency between two industries operating withinthe same environmental constraint: the more eco-efficient one is the one that has the higher output level. We compare the relative eco-efficiency of two technologies characterizing two industries, and then of two firms within the same industry. Weshow that all these comparisons depend, through the equilibrium, on the environmental constraint imposed at the industry level. We also show that firm's profitability at the equilibrium depends on its eco-efficiency, but also on its labour elasticity and permits allocation: the more eco-efficient firm is not necessarily the more profitable one.

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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2004072.

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Date of creation: 01 Oct 2004
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Handle: RePEc:cor:louvco:2004072

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Related research
Keywords: eco-efÞciency; benchmarking; tradable permits;

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Find related papers by JEL classification:
D20 - Microeconomics - - Production and Organizations - - - General
Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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.:

  1. Pittman, Russell W, 1983. "Multilateral Productivity Comparisons with Undesirable Outputs," Economic Journal, Royal Economic Society, vol. 93(372), pages 883-91, December. [Downloadable!] (restricted)
  2. Stokey, Nancy L, 1998. "Are There Limits to Growth?," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(1), pages 1-31, February.
  3. Forsund, Finn R & Jansen, Eilev S, 1977. "On Estimating Average and Best Practice Homothetic Production Functions via Cost Functions," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 18(2), pages 463-76, June. [Downloadable!] (restricted)
  4. Zieschang, Kimberly D., 1984. "An extended farrell technical efficiency measure," Journal of Economic Theory, Elsevier, vol. 33(2), pages 387-396, August. [Downloadable!] (restricted)
  5. Montgomery, W. David, 1972. "Markets in licenses and efficient pollution control programs," Journal of Economic Theory, Elsevier, vol. 5(3), pages 395-418, December. [Downloadable!] (restricted)
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  1. Thierry, BRECHET & Henry, TULKENS, 2006. "From BAT (best available technique) to BCAT (best combination of available techniques)," Discussion Papers (ECON - Département des Sciences Economiques) 2006060, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
  2. Simon P., ANDERSON & Jean J., GABSZEWICZ, 2005. "The media and advertising : a table of two-sided markets," Discussion Papers (ECON - Département des Sciences Economiques) 2005060, Université catholique de Louvain, Département des Sciences Economiques. [Downloadable!]
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