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On the properties of an emission-generating technology and its parametric representation

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  • Sushama Murty

Abstract

We propose a set of comprehensive axioms that seek to capture our intuitive understanding of the properties of an emission-generating technology (EGT). We show that an EGT that satisfies these axioms can be parametrically represented by more than one implicit production function that are derived from it. Here, these production functions take the form of distance functions first introduced by Shephard (Cost and production functions, Princeton University Press, Princeton, 1953 ) and Malmquist (Trabajos de estadistica 4:209–242, 1953 ). One of these production relations has properties of a neo-classical production function that shows how standard inputs are transformed into standard (intended) outputs. The remaining reflect trade-offs, observed in nature, between emissions, emission-causing goods, and cleaning-up activities of the producing unit. We illustrate this by considering two cases: (1) where each type of cleaning-up activity jointly mitigates all types of emissions and (2) where cleaning-up activities are emission-specific allowing also for the possibility that a cleaning-up activity, while helping to reduce certain emissions, can also contribute to more of some other types of emissions. Copyright Springer-Verlag Berlin Heidelberg 2015

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  • Sushama Murty, 2015. "On the properties of an emission-generating technology and its parametric representation," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 60(2), pages 243-282, October.
  • Handle: RePEc:spr:joecth:v:60:y:2015:i:2:p:243-282
    DOI: 10.1007/s00199-015-0877-8
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    References listed on IDEAS

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    13. Murty, Sushama, 2010. "Externalities and fundamental nonconvexities: A reconciliation of approaches to general equilibrium externality modeling and implications for decentralization," Journal of Economic Theory, Elsevier, vol. 145(1), pages 331-353, January.
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    Cited by:

    1. Abad, Arnaud & Briec, Walter, 2019. "On the axiomatic of pollution-generating technologies: Non-parametric production analysis," European Journal of Operational Research, Elsevier, vol. 277(1), pages 377-390.
    2. Sushama Murty & Resham Nagpal, "undated". "Measuring output-based technical efficiency of Indian coal-based thermal power plants: A by-production approach," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 18-07, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    3. Arjomandi, Amir & Dakpo, K. Hervé & Seufert, Juergen Heinz, 2018. "Have Asian airlines caught up with European Airlines? A by-production efficiency analysis," Transportation Research Part A: Policy and Practice, Elsevier, vol. 116(C), pages 389-403.
    4. Dakpo, K Hervé & Latruffe, Laure, 2016. "Agri-environmental subsidies and French suckler cow farms’ technical efficiency accounting for GHGs," 90th Annual Conference, April 4-6, 2016, Warwick University, Coventry, UK 236339, Agricultural Economics Society.
    5. Alexandre Repkine, 2023. "The Estimation of a Polluting By-Production Technology Using Statistical Copulas," Journal of Productivity Analysis, Springer, vol. 60(1), pages 49-62, August.
    6. Sushama Murty & R. Robert Russell, "undated". "Bad Outputs," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 17-06, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    7. Sushama Murty & Resham Nagpal, "undated". "Measuring marginal abatement costs in the Indian thermal power sector: A by-production approach," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 19-06, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    8. Dakpo, K Hervé, 2016. "On modeling pollution-generating technologies: a new formulation of the by-production approach," Working Papers 245191, Institut National de la recherche Agronomique (INRA), Departement Sciences Sociales, Agriculture et Alimentation, Espace et Environnement (SAE2).
    9. Sushama Murty & R. Robert Russell, 2021. "A commentary on “Performance measurement and joint production of intended and unintended outputs” by Finn Førsund," Journal of Productivity Analysis, Springer, vol. 55(3), pages 177-184, June.
    10. Sushama Murty & R. Robert Russell, 2018. "Modeling emission-generating technologies: reconciliation of axiomatic and by-production approaches," Empirical Economics, Springer, vol. 54(1), pages 7-30, February.
    11. K Hervé Dakpo, 2016. "On modeling pollution-generating technologies: a new formulation of the by-production approach," Working Papers SMART 16-06, INRAE UMR SMART.
    12. Roshdi, Israfil & Hasannasab, Maryam & Margaritis, Dimitris & Rouse, Paul, 2018. "Generalised weak disposability and efficiency measurement in environmental technologies," European Journal of Operational Research, Elsevier, vol. 266(3), pages 1000-1012.
    13. Finn R. Førsund, 2018. "Multi-equation modelling of desirable and undesirable outputs satisfying the materials balance," Empirical Economics, Springer, vol. 54(1), pages 67-99, February.
    14. Førsund, Finn R, 2017. "Pollution Meets Efficiency: Multi-equation modelling of generation of pollution and related efficiency measures," Memorandum 09/2017, Oslo University, Department of Economics.
    15. Sushama Murty, 2016. "Measuring unilateral and multilateral gains from tackling current economic inefficiencies in CO2 reductions: Theory and evidence," Discussion Papers 1604, University of Exeter, Department of Economics.
    16. Sushama Murty & Resham Nagpal, "undated". "Choice of models for emission-generating technologies and designing technical efficiency improvements," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 19-01, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.
    17. Subhash C. Ray & Shilpa Sethia, 2023. "A State-Level Resource Allocation Model for Emission Reduction and Efficiency Improvement in Thermal Power Plants," Working papers 2023-08, University of Connecticut, Department of Economics.
    18. Finn R. Førsund, 2021. "Performance measurement and joint production of intended and unintended outputs," Journal of Productivity Analysis, Springer, vol. 55(3), pages 157-175, June.
    19. Zuoxiang Zhao, 2017. "Measurement of production efficiency and environmental efficiency in China’s province-level: a by-production approach," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 19(4), pages 735-759, October.
    20. Sushama Murty & Resham Nagpal, "undated". "Weighted index of graph efficiency improvements for a by-production technology and its application to Indian coal-based thermal power sector," Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi Discussion Papers 18-08, Centre for International Trade and Development, Jawaharlal Nehru University, New Delhi, India.

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    More about this item

    Keywords

    Theory of production; Emission-generating technologies ; By-production; Free input and output disposability; Weak disposability; Costly disposability; Functional representations of multi-output production technologies; D20; D24; Q50;
    All these keywords.

    JEL classification:

    • D20 - Microeconomics - - Production and Organizations - - - General
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • Q50 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - General

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