A theoretical measure of environmental efficiency
AbstractWe study, in a simple model, the partial equilibrium of an industry with n firms endowed by different technologies which have different pollution effects. The price of input (labour) and the demand curve to the industry are given. Pollution is restricted by a tradable market of permits in the industry. We define an environmental efficiency factor for each firm. Given the total dotation of permits, the larger is the environmental efficiency factor, the larger is the firm's contribution to total production. To study the long run efficiency, we explicit the role of capital in production and obtain a proportional environmental efficiency factor. Last, we analyze the consequences of permits' allocations on the profitability of the firms.
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Bibliographic InfoPaper provided by THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise in its series THEMA Working Papers with number 2003-21.
Date of creation: 2003
Date of revision:
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Other versions of this item:
- D2 - Microeconomics - - Production and Organizations
- D61 - Microeconomics - - Welfare Economics - - - Allocative Efficiency; Cost-Benefit Analysis
- L19 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Other
- Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
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- Thierry Bréchet & Philippe Michel, 2007.
"Environmental performance and equilibrium,"
Canadian Journal of Economics,
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- Gilles Rotillon & Pierre-André Jouvet & Philippe Michel, 2004.
"Equilibrium with a Market of Permits,"
2004.94, Fondazione Eni Enrico Mattei.
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