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  • 1. Bostian, Moriah
    et al.
    Färe, Rolf
    Grosskopf, Shawna
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Department of Economics, Oregon State University, Corvallis, OR, USA.
    Lundgren, Tommy
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE).
    Environmental investment and firm performance: a network approach2016In: Energy Economics, ISSN 0140-9883, E-ISSN 1873-6181, Vol. 57, p. 243-255Article in journal (Refereed)
    Abstract [en]

    This study examines the role of investment in environmental production practices for both environmental performance and energy efficiency over time. We employ a network DEA approach that links successive production technologies through intertemporal investment decisions with a period by period estimation. This allows us to estimate energy efficiency and environmental performance separately, as well as productivity change and its associated decompositions into efficiency change and technology change. Incorporating a network model also allows us to account for both short-term environmental management practices and long-term environmental investments in each of our productivity measures. We apply this framework to a panel of detailed plant-level production data for Swedish manufacturing firms covering the years 2002-2008.

  • 2. Bostian, Moriah
    et al.
    Färe, Rolf
    Grosskopf, Shawna
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics. Department of Economics, Oregon State University, USA.
    Lundgren, Tommy
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics.
    Network Representations of Pollution-Generating Technologies2017In: International Review of Environmental and Resource Economics, ISSN 1932-1465, E-ISSN 1932-1473, Vol. 11, no 3, p. 193-231Article in journal (Refereed)
    Abstract [en]

    We update developments on modeling technology including unintended outputs and show how these can, at least to a large extent, be incorporated in a network model framework. Recently there have been efforts to specify more detailed models which include multiple functions to separately capture intended and unintended products. Yet another recent strand of the recent literature has also explicitly tried to include a material balance condition in the model. We see this general evolution as beginning with what might be called a black box technology, with inputs entering the box, and good and bad outputs exiting the box. The more sophisticated models can be thought of as filling in the black box with the more detailed processes involved with production, prevention and abatement, with production accompanied by undesirable byproducts subject to legal regulations and laws of nature. This can be modeled as a network within the black box.

  • 3. Bostian, Moriah
    et al.
    Färe, Rolf
    Grosskopf, Shawna
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Department of Economics, Oregon State University, Corvallis, OR, USA.
    Lundgren, Tommy
    Weber, William L.
    Time substitution for environmental performance: The case of Swedish manufacturing2018In: Empirical Economics, ISSN 0377-7332, E-ISSN 1435-8921, Vol. 54, no 1, p. 129-152Article in journal (Refereed)
    Abstract [en]

    We extend recent advances in time substitution modeling to a directional distance function framework, in order to examine the environmental performance of firms in Sweden's pulp and paper industry for the years 2002-2008. Our data allow us to estimate the optimal reallocation of environmental investments, expenditures and energy use to simultaneously maximize production output and minimize emissions in the years immediately before and after the implementation of the European Union Emissions Trading Scheme. We find some evidence of overall productivity decline when considering both emissions and output objectives, due primarily to technological decline, and that cumulative dynamic inefficiency outweighs static inefficiency. A comparison of optimal investment with observed investment indicates that firms could have improved their performance by reallocating environmental investments to early periods and production-oriented investment to later periods.

  • 4. Färe, Rolf
    et al.
    Grosskopf, Shawna
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Department of Economics, Oregon State University, Corvallis, OR, USA.
    Lundgren, Tommy
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE).
    Marklund, Per-Olov
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Centre for Regional Science (CERUM).
    Wechao, Zhou
    Umeå University, Faculty of Social Sciences, Centre for Regional Science (CERUM).
    Pollution-generating technologies and environmental efficiency2014In: Journal of Chinese Economic and Business Studies, ISSN 1476-5284, E-ISSN 1476-5292, Vol. 12, no 3, p. 233-251Article in journal (Refereed)
    Abstract [en]

    In this paper, we study environmental efficiency (EE) within a pollution-generating technology. Good output and bad output (pollution) are explicitly modeled by imposing technology properties of disposability and null-jointness. With data on firms from Swedish manufacturing, we investigate the potential to reduce emissions, and we take a closer look at the pulp and paper sector. Dividing the firms into ‘brown’ and ‘green’ firms, we find that there is significant potential, in both categories, to improve EE, and hence lower emissions, of three air pollutants (CO2, SO2, NOx). Generally, the methods and results encourage similar and comparative studies on the manufacturing sector in other countries. If there is a comparable potential elsewhere, such as in major polluting countries like China, there is potential to promote a sustainable society by conducting effective energy and climate policies. We also suggest that treating biofuels as completely carbon neutral, as is common practice when constructing emission data in Sweden (Statistics Sweden), may lead to incorrect EE scores and consequently misleading policy implications.

  • 5.
    Färe, Rolf
    et al.
    Dept. of Agriculture and Resource Economics, Dept. of Economics, Oregon State University.
    Grosskopf, Shawna
    Dept. of Economics, Oregon State University.
    Lundgren, Tommy
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). SLU.
    Marklund, Per-Olov
    Umeå University, Faculty of Social Sciences, Centre for Regional Science (CERUM). Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE).
    Wenchao, Zhou
    Umeå University, Faculty of Social Sciences, Centre for Regional Science (CERUM).
    Productivity: should we include bads?2012Report (Other academic)
    Abstract [en]

    This paper studies the interaction between economic and environmental performance. Applying the directional output distance function approach, the purpose is to compare estimates of Luenberger total factor productivity indicators, including and excluding bad outputs. Specifically, based on unique firm level data from Swedish manufacturing covering the period 1990 to 2008, we explore to what extent excluding bad outputs leads to erroneous productivity measurement. The main conclusion is that bad outputs should not only be included in the estimations, but also reduction in bad outputs should be credited. From this point of view the directional output distance function approach and the Luenberger indicator serves as an appropriate basis of productivity measurement.

  • 6.
    Färe, Rolf
    et al.
    Oregon State University.
    Grosskopf, Shawna
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Oregon State University and SLU.
    Lundgren, Tommy
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). SLU.
    Marklund, Per-Olov
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Centre for Regional Science (CERUM). SLU.
    Wenchao, Zhou
    Umeå University, Faculty of Social Sciences, Centre for Regional Science (CERUM).
    Which bad is worst?: An application of Johansen's capacity model2013Report (Other academic)
    Abstract [en]

    The production of desirable (good) outputs is frequently accompanied by unintended production of undesirable (bad) outputs. If two or more of these undesirable outputs are produced as byproducts, one may ask: ‘Which bad is worst?’ By worst we mean which bad inhibits the production of desirable outputs the most if it is regulated. We develop a model based on Leif Johansen’s capacity framework by estimating the capacity limiting effect of the bads. Our model resembles what is referred to as the von Liebig Law of the Minimum, familiar from the agricultural economics literature. To illustrate our model we apply our approach to a firm level data set from the Swedish paper and pulp industry.

  • 7. Walden, John B.
    et al.
    Färe, Rolf
    Grosskopf, Shawna
    Umeå University, Faculty of Social Sciences, Center for Environmental and Resource Economics (CERE). Umeå University, Faculty of Social Sciences, Umeå School of Business and Economics (USBE), Economics. Department of Economics, Oregon State University.
    Measuring change in productivity of a fishery with the Bennet-Bowley indicator2017In: Fishery Bulletin, ISSN 0090-0656, E-ISSN 1937-4518, Vol. 115, no 3, p. 273-283Article in journal (Refereed)
    Abstract [en]

    The U.S. National Marine Fisheries Service has undertaken to measure the economic performance of fisheries that have implemented catch shares as a management strategy. Among the metrics used, change in productivity was identified as important, and considerable research has been conducted to construct metrics and to measure this change. We introduce the Bennet-Bowley (BB) indicator as another tool to measure change in productivity, show how to construct the indicator, and apply it to the northeast multispecies fishery, which adopted a catch share system in 2010. The BB indicator is then used to show the contribution of vessels entering, continuing within, and exiting the fishery to overall fleet productivity. Results showed that after catch share management, fleet productivity declined and that vessels continuing in the fishery as a group contributed the most to a decline in aggregate productivity. On a per-vessel basis, a core group of vessels continuing in the fishery and that were present throughout the study period showed a decline in productivity after catch share management was implemented. These declines were caused by reduced outputs (i.e. catch) in relation to use of inputs (e.g. labor, fuel, materials) after catch shares were implemented.

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