Description: The Environment as a Factor of Production

The Environment as a Factor of Production

The authors develop a model of environmental resource use in production with an empirical analysis of how electric power companies consume and bank sulfur dioxide pollution permits. The model considers emissions, fuels, and labor as variable inputs...

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Bibliographic Details
Main Authors:	Considine, Timothy J., Larson, Donald F.
Language:	English en_US
Published:	World Bank, Washington, D.C. 2013
Subjects:	ABATEMENT ABATEMENT COST ABATEMENT COST FUNCTIONS ABATEMENT COSTS ACID RAIN AIR QUALITY AIR QUALITY STANDARDS ALLOCATION OF PERMITS ALLOWANCE TRADING ARBITRAGE BASELINE LEVELS CAPITAL GAIN CARBON CARBON DIOXIDE CLEAN AIR CLEAN AIR ACT CLEAN AIR ACT AMENDMENTS COAL COAL MINING COAL USE COMMON PROPERTY COMMON PROPERTY RESOURCES COMPLIANCE COSTS CONSTANT RETURNS TO SCALE CONVERGENCE COST SAVINGS DEREGULATION DESULFURIZATION DISCOUNT RATE DISEQUILIBRIUM DIVERGENCE ECONOMETRIC ANALYSIS ECONOMIC ACTIVITY ECONOMIC INCENTIVES ECONOMIES OF SCALE ELASTICITIES ELECTRIC POWER ELECTRIC POWER PLANTS ELECTRICITY EMISSION EMISSION CONTROL EMISSION CONTROLS EMISSION STANDARDS EMISSIONS EMISSIONS CONSTRAINTS EMISSIONS REDUCTIONS EMISSIONS STANDARDS EMPIRICAL ANALYSIS EMPIRICAL STUDIES ENVIRONMENTAL DAMAGES ENVIRONMENTAL ECONOMICS ENVIRONMENTAL POLICY ENVIRONMENTAL POLLUTANTS ENVIRONMENTAL PROTECTION ENVIRONMENTAL PROTECTION AGENCY ENVIRONMENTAL RESOURCES EQUILIBRIUM FIXED INPUTS FUEL FUEL SWITCHING FUEL USE FUELS GAS GENERATION CAPACITY GENERATION UNITS GREENHOUSE GREENHOUSE GASES HIGH SULFUR COAL INDUSTRIAL BOILERS INFLATION INPUT PRICES INPUT USE INTEREST RATE INVENTORIES LOW SULFUR COAL LOW SULFUR COAL PRICES MARGINAL ABATEMENT MARGINAL ABATEMENT COST MARGINAL ABATEMENT COSTS MARGINAL COST MARGINAL COSTS MARGINAL EMISSIONS MARKET PRICES MERCURY NATURAL RESOURCE ECONOMICS NITROGEN NITROGEN OXIDE OPPORTUNITY COST OZONE PERMIT PRICE PERMIT SALES PERMIT TRADING PERMITS PET POLICY INSTRUMENTS POLLUTION POLLUTION ABATEMENT POLLUTION CONTROL POLLUTION PERMITS POWER GENERATION POWER PLANTS PRODUCTION COSTS PRODUCTION FUNCTION PRODUCTION FUNCTIONS PROFIT MAXIMIZATION QUALITY STANDARDS RAW MATERIALS REDUCING EMISSIONS RESOURCE USE RETROFITTING RISK PREMIUM SECONDARY MARKETS SO2 SOLID WASTES SPOT MARKET SUBSTITUTION ELASTICITIES SULFUR SULFUR DIOXIDE TECHNOLOGICAL CHANGE TIME SERIES TOTAL COSTS TRADABLE PERMITS TRANSACTIONS COSTS UNDERESTIMATES UTILITIES VALUATION VARIABLE INPUTS ENVIRONMENTAL ASPECTS OF POLLUTION POLLUTANTS LABOR FACTORS OF PRODUCTION GREENHOUSE GAS EMISSIONS
Online Access:	http://documents.worldbank.org/curated/en/2004/04/4125151/environment-factor-production http://hdl.handle.net/10986/14112

Description
Summary:	The authors develop a model of environmental resource use in production with an empirical analysis of how electric power companies consume and bank sulfur dioxide pollution permits. The model considers emissions, fuels, and labor as variable inputs with quasi-fixed inputs of permits and capital. Incorporating information from permit markets allows the authors to distinguish between user costs and asset shadow values. Their findings indicate that firms are holding stocks of pollution permits for reasons other than short-term cost savings. The results also reveal substantial substitution possibilities between emissions, permits stocks, and other factors of production. The authors speculate that anticipated secondary markets for carbon-offset inventories related to the flexibility mechanisms of the Kyoto Protocol will have similar effects for greenhouse-gas emitting firms.

The Environment as a Factor of Production

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