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Environmental Emissions and Production Economics: Implications of the Materials Balance

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  • Udo Ebert
  • Heinz Welsch

Abstract

In modeling emissions, the literature has usually specified an explicit emission function, or treated emissions as a production input. We examine the validity of these approaches, taking into account the materials balance principle. We show that a technology can equivalently be described by (i) a production function with material and nonmaterial inputs and bounded marginal product of the material input, (ii) a well-behaved production function with emissions as an input, and (iii) a well-behaved emission function, if the materials balance is accounted for as an additional condition. We offer a forma derivation of common, but not rigorously established modeling approaches. Copyright 2007, Oxford University Press.

Suggested Citation

  • 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.
    • Handle: RePEc:oup:ajagec:v:89:y:2007:i:2:p:287-293
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    File URL: http://hdl.handle.net/10.1111/j.1467-8276.2007.00997.x
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