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Analyzing Interplant Marginal Abatement Cost Differences: A Directional Output Distance Function Approach
Umeå University, Faculty of Social Sciences, Department of Economics.
2003 (English)Report (Other academic)
Abstract [en]

The purpose of this paper is to compute and evaluate producers’ marginal abatement costs (MACs). These costs are obtained by calculating shadow prices of bad outputs from the production technology, which is represented by the estimated directional output distance function. To be more specific, this paper considers the Swedish pulp industry when the regulatory authority has granted each producing plant a maximally allowed emission level. In each case, area residents and other parties concerned have been allowed to express their views, which possibly prepared the way for other factors than prescribed by environmental law, to influence the stringency of the finally allowed emission levels and, therefore, the MACs. The main focus is on whether the calculated MACs reveal that differences between counties in, e.g., economical characteristics, were influential when the authority, during 1983-1990, restricted 12 geographically scattered pulp plants regarding emissions. The result indicates that the MACs vary between many of the plants and that county differences were taken into account when imposing environmental restrictions on the plants.

Place, publisher, year, edition, pages
Umeå: Umeå universitet , 2003. Vol. 618, 36 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 618
National Category
Economics
Identifiers
URN: urn:nbn:se:umu:diva-3761OAI: oai:DiVA.org:umu-3761DiVA: diva2:142624
Distributor:
Nationalekonomi, 90187, Umeå
Available from: 2004-02-25 Created: 2004-02-25 Last updated: 2009-08-11Bibliographically approved
In thesis
1. Essays on Productive Efficiency, Shadow Prices, and Human Capital
Open this publication in new window or tab >>Essays on Productive Efficiency, Shadow Prices, and Human Capital
2004 (English)Doctoral thesis, comprehensive summary (Other academic)
Alternative title[sv]
Analyser av produktionseffektivitet, skuggpriser, och humankapital
Abstract [en]

This thesis consists of five papers, four of them basically concerning environmental issues, while the fifth paper addresses the issue of measuring output from the educational sector.

The first paper starts from the fact that industrial activity causes environmental damage. Therefore, public authorities are called upon to regulate the behavior of producers by, e.g., legislating maximally allowed emission levels, which give rise to abatement costs. In this paper, marginal abatement costs (MACs) are estimated and a procedure to empirically analyze why MACs may vary between producers is suggested. The main focus is on whether the MACs in the Swedish pulp industry reveal that differences between counties in, e.g., economical characteristics, were influential when the authority, during 1983-1990, restricted 12 geographically scattered plants regarding emissions. The result indicates that county differences were influential.

The second paper analyses and suggests a procedure for testing the Porter hypothesis. Part of this hypothesis is based on the argument that increased environmental stringency not only brings a cleaner environment, but also makes the polluting producers aware of the opportunity of using resources more efficiently. The particular test suggested considers whether there is a positive correlation between producers’ technical output efficiency and environmental stringency, approximated by a regulatory intensity index. It is empirically applied on 12 Swedish pulp plants during 1983-1990. No support for the Porter hypothesis is found in this particular case.

The third paper deals with the climate policy issue. Under the Kyoto Protocol, the European Union agreed to reduce its emission of greenhouse gases by 8 percent in comparison with the level in 1990. The Burden-Sharing Agreement (BSA) further redistributes the 8 percent reduction target among the member states. This paper evaluates the BSA both from an economical and a political perspective, i.e., whether cost-efficiency and equity, respectively, were considered when the BSA was settled. The empirical result indicates that both efficiency and equity were considered as important to the BSA.

The fourth paper evaluates the Swedish Producer Responsibility Ordinance (PRO), fully implemented in 1994, which states that sorted out, domestically collected waste paper, must be recycled by the paper industry and, therefore, cannot be incinerated by the heating industry in purpose of recovering energy. The result indicates that this policy has contributed to inefficient waste paper allocation among some of the paper producers. The result further indicates that the priority made by the PRO, i.e., that waste paper recycling is preferable to incineration, should be reconsidered.

The fifth paper relates the empirical attempts of measuring output from the educational sector to theoretical results about the welfare significance of a comprehensive Net National Product (NNP) measure. It is shown that economic theory provides a more focused way of interpreting such output estimates. The paper also contains estimates of the output from the Swedish educational sector. Among the results, it is shown that the private gross output value produced by higher education is approximately 2 percent of GDP. Furthermore, the private rate of return on investments in higher education in Sweden is calculated to 8.6 percent.

Place, publisher, year, edition, pages
Umeå: Umeå universitet, 2004. 150 p.
Series
Umeå economic studies, ISSN 0348-1018 ; 621
Keyword
Economics, directional output distance function, Porter hypothesis, Burden-Sharing Agreement, Producer Responsibility Ordinance, Output of the educational sector, Nationalekonomi
National Category
Economics
Research subject
Economics
Identifiers
urn:nbn:se:umu:diva-201 (URN)91-7305-597-2 (ISBN)
Distributor:
Nationalekonomi, 90187, Umeå
Public defence
2004-03-16, S205h, Samhällsvetarhuset, Umeå universitet, Umeå, 10:00 (English)
Opponent
Supervisors
Available from: 2004-02-25 Created: 2004-02-25 Last updated: 2009-08-11Bibliographically approved

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http://ideas.repec.org/p/hhs/umnees/0618.htmlhttp://www.econ.umu.se/ues/ues618.pdfhttp://swopec.hhs.se/umnees/abs/umnees0618.htm

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