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Polluters and Abaters

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Author Info

  • Alain-Désiré Nimubona

    (Department of Economics, University of Waterloo)

  • Bernard Sinclair-Desgagné

    (International Economics and Governance Chair, HEC Montreal)

Abstract

To comply with laws, regulations and social demands, polluting firms increasingly purchase the needed means from specialized suppliers. This paper an- alyzes this relatively recent phenomenon. We show how environmental regulation, the size of the output market, the elasticity of demand for abatement goods and services, and the fact that in-house and outsourced abatement expenses are substitutes or complements can influence a polluter's make-or-buy decision. Specific features of abatement outsourcing are highlighted, qualifications and refinements of the theory of vertical integration are then proposed, and some consequences for environmental policy are briefly discussed.

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File URL: http://economics.uwaterloo.ca/documents/10-009ADN.pdf
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Bibliographic Info

Paper provided by University of Waterloo, Department of Economics in its series Working Papers with number 1009.

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Length: 25 pages
Date of creation: Sep 2010
Date of revision: Sep 2010
Handle: RePEc:wat:wpaper:1009

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  1. Maia David & Bernard Sinclair-Desgagné, 2005. "Environmental regulation and the eco-industry," Working Papers hal-00243019, HAL.
  2. Alain-Désiré Nimubona & Bernard Sinclair-Desgagné, 2013. "The Pigouvian Tax Rule in the Presence of an Eco-Industry," Economics Bulletin, AccessEcon, vol. 33(1), pages 747-752.
  3. Stefan Ambec & Paul Lanoie, 2007. "When and Why Does It Pay To Be Green?," CIRANO Working Papers 2007s-20, CIRANO.
  4. Greaker, Mads & Rosendahl, Knut Einar, 2008. "Environmental policy with upstream pollution abatement technology firms," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 246-259, November.
  5. Poyago-Theotoky, J.A., 2007. "The organization of R&D and environmental policy," Journal of Economic Behavior & Organization, Elsevier, vol. 62(1), pages 63-75, January.
  6. David, Maia & Nimubona, Alain-Désiré & Sinclair-Desgagné, Bernard, 2011. "Emission taxes and the market for abatement goods and services," Resource and Energy Economics, Elsevier, vol. 33(1), pages 179-191, January.
  7. Joan Canton & Antoine Soubeyran & Hubert Stahn, 2008. "Environmental Taxation and Vertical Cournot Oligopolies: How Eco-industries Matter," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(3), pages 369-382, July.
  8. Maia David & Bernard Sinclair-Desgagné, 2010. "Pollution Abatement Subsidies and the Eco-Industry," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 45(2), pages 271-282, February.
  9. Requate, Till, 2003. "Commitment and Timing of Environmental Policy, Adoption of New Technology and Repercussions on R&D," Economics Working Papers 2003,07, Christian-Albrechts-University of Kiel, Department of Economics.
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