Firm and industry cost functions for the control of emissions
1985 (English)Report (Other academic)
The relation between firm (micro) and industry (macro) cost functions for the control of emissions are analyzed in this paper. Using aggregation methods found in modern production theory, it is demonstrated how industry cost functions can be constructed from firm functions.
The model is illustrated with an empirical study of the Swedish Iron & Steel and Pulp & Paper industries where empirical micro functions are estimated and aggregated into macro relations. The main empirical result is that the cost of reduction at the micro level reveal strong economics of scale while the opposite is true at the macro level. The elasticity of cost with respect to reduced emissions varies (at macro level) around 1.5, indicating that a 1 % increase in emission reduction increases cost with about 1.5 %.
Place, publisher, year, edition, pages
Umeå: Umeå universitet , 1985. , 29 p.
, Working paper - University of Umeå, ISSN 0280-8005 ; 1985:2
IdentifiersURN: urn:nbn:se:umu:diva-85272OAI: oai:DiVA.org:umu-85272DiVA: diva2:692598