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Environmental misallocation in the copper industry

Author

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  • Correa, Juan A.
  • Gómez, Marcos
  • Luengo, Andrés
  • Parro, Francisco

Abstract

We use mine-level data from the international copper industry to quantify environmental misallocation. We define this concept as the ratio between the observed carbon dioxide (CO2) emissions in the industry and the level reached by a social planner that allocates the current aggregate output across mines so as to minimize emissions, conditional on some well-defined extraction rules. We find that CO2 emissions from the world copper industry are reduced by 47% under the planner's allocation. We also provide evidence suggesting that a cleaner environment is not necessarily tied to lower levels of productive efficiency.

Suggested Citation

  • Correa, Juan A. & Gómez, Marcos & Luengo, Andrés & Parro, Francisco, 2021. "Environmental misallocation in the copper industry," Resources Policy, Elsevier, vol. 71(C).
  • Handle: RePEc:eee:jrpoli:v:71:y:2021:i:c:s0301420721000209
    DOI: 10.1016/j.resourpol.2021.102003
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    2. Renaud Coulomb & Fanny Henriet & Léo Reitzmann, 2021. "'Bad' Oil, 'Worse' Oil and Carbon Misallocation," Working Papers halshs-03244647, HAL.

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    More about this item

    Keywords

    Copper industry; Pollution; Misallocation;
    All these keywords.

    JEL classification:

    • Q30 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Nonrenewable Resources and Conservation - - - General
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General
    • Q52 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Pollution Control Adoption and Costs; Distributional Effects; Employment Effects

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