Emission Targets and Equilibrium Choice of Technique
We study the technological pre-conditions for a cost-minimizing choice of technique in the presence of government emission targets on by-products of production. Whether a by-product is a desirable commodity or an undesirable pollutant is determined endogeneously as part of the price-quantity equilibrium solution. Non-trivial counterexamples highlight the potential risk of over-ambitious pollution targets. We show that pollution targets can be supported by the appropriate taxes providing that technology allows for a certain type of labour-intensive pollution abatement activities. Our proof is constructive: the tax equilibria we posit can be computed by the Lemke Complementary Pivoting Algorithm.
|Date of creation:||Sep 2002|
|Contact details of provider:|| Postal: Department of Economics, University of Keele, Keele, Staffordshire, ST5 5BG - United Kingdom|
Phone: +44 (0)1782 584581
Fax: +44 (0)1782 717577
Web page: http://www.keele.ac.uk/depts/ec/cer/
More information through EDIRC
|Order Information:|| Postal: Centre for Economic Research, Research Institute for Public Policy and Management, Keele University, Staffordshire ST5 5BG - United Kingdom|
Web: http://www.keele.ac.uk/depts/ec/cer/pubs_kerps.htm Email:
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Christian Bidard & Guido Erreygers, 1998. "The Adjustment Property," Economic Systems Research, Taylor & Francis Journals, vol. 10(1), pages 3-18.
- Coggins, Jay S. & Swinton, John R., 1996.
"The Price of Pollution: A Dual Approach to Valuing SO2Allowances,"
Journal of Environmental Economics and Management,
Elsevier, vol. 30(1), pages 58-72, January.
- JAY S. COGGINS & John R. Swinton, 1994. "The Price of Pollution: A Dual Approach to Valuing SO2 Allowances," Wisconsin-Madison Agricultural and Applied Economics Staff Papers 378, Wisconsin-Madison Agricultural and Applied Economics Department.
- Ekins, Paul & Barker, Terry, 2001. " Carbon Taxes and Carbon Emissions Trading," Journal of Economic Surveys, Wiley Blackwell, vol. 15(3), pages 325-376, July.
- Dantzig, George B. & Manne, Alan S., 1974. "A complementarity algorithm for an optimal capital path with invariant proportions," Journal of Economic Theory, Elsevier, vol. 9(3), pages 312-323, November.
- J. H. Dales, 1968. "Land, Water, and Ownership," Canadian Journal of Economics, Canadian Economics Association, vol. 1(4), pages 791-804, November.
- Elizabeth Symons & John Proops & Philip Gay, 1994. "Carbon taxes, consumer demand and carbon dioxide emissions: a simulation analysis for the UK," Fiscal Studies, Institute for Fiscal Studies, vol. 15(2), pages 19-43, May.
- Kurz, Mordecai, 1969. "Tightness and substitution in the theory of capital," Journal of Economic Theory, Elsevier, vol. 1(3), pages 244-272, October.
- Bidard, Christian, 1990. "An Algorithmic Theory of the Choice of Techniques," Econometrica, Econometric Society, vol. 58(4), pages 839-859, July.
- Steenge, Albert E, 1978. "Environmental Repercussions and the Economic Structure: Further Comments," The Review of Economics and Statistics, MIT Press, vol. 60(3), pages 482-486, August. Full references (including those not matched with items on IDEAS)
When requesting a correction, please mention this item's handle: RePEc:kee:kerpuk:2002/12. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Martin E. Diedrich)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.