Environmental regulation and green productivity growth: Evidence from Italian manufacturing industries

Environmental policy is at the core of the current research debate and policy action. Few studies have discussed the impact of environmental regulation on productivity growth at industry level, and the empirical evidence on this issue is still controversial. Based on panel data on thirteen Italian manufacturing industries from 1995 to 2017, this study analyzes the effect of environmental policies on sectoral productivity by measuring the adjusted productivity growth using the Malmquist-Luenberger index. The main result of this analysis is that environmental regulation has no negative effect in most of the sample industries. A bootstrapping approach has been used to assess the robustness of estimated results

Potential gains from trading bad outputs: The case of U.S. electric power plants

Jointly with kilowatt-hours (kWh), electric power plants also produce CO₂, NO[subscript x], and SO₂. In this paper, we apply an environmental production model based on data envelopment analysis (DEA) to compare the production of kWh under command-and-control regulation of the undesirable byproduct with tradable permit regulation of the byproduct. This is done for each of the three undesirable outputs and combinations of them. We apply our model to a dataset of 80 coal-fired electric power plants from 1995 to 2005. From this we can identify the potential gains from trading the most common undesirable outputs produced by coal-fired electric power plants.Keywords: Joint production, Weak disposability, Tradable permit

Tradable permits and unrealized gains from trade

With the advent of tradable permit programs for bad outputs (e.g., SO₂ emissions); concerns arose over whether the theoretical gains from trade would be realized. We will employ a methodology that calculates the potential gains accruing to coal-fired electric power plants from implementing a tradable permit program. The magnitude of the potential gains in a plant's kilowatt hour output from a tradable permit program relative to its observed production provides insights into the existence of intertemporal allocative inefficiencies and spatial allocative inefficiencies after the implementation of a tradable permit program.KEYWORDS: SO₂ emissions, Joint production model, Tradable permitsThis is the publisher’s final pdf. The published article is copyrighted by Elsevier and can be found at: http://www.journals.elsevier.com/energy-economics

Substitutability among undesirable outputs

In recent years, economists have started to move beyond calculating regulatory effects on a pollutant-by-pollutant basis since their interaction is important. In this study, we take up this issue. To allow for joint production of multiple pollutants and marketable output, we specify our technology using a directional distance function. This allows us to treat pollutants as joint outputs, yet accounts for their ‘undesirability’. We estimate the distance function for a sample of coal-fired electric power plants from 1985 to 1998, which includes the first 4 years of Phase I of the Clean Air Act Amendments of 1990. We focus on the interaction between SO₂ and NOₓ , as they became more highly regulated and estimate shadow prices of the pollutants and the Morishima elasticity of transformation between two pollutants, NOₓ and SO₂, as well as with respect to the desirable output, kilowatt-hours of electricity. As expected, we find that power plants increase NOₓ emissions as they decrease SO₂, i.e. they are substitutes

The Good, the Bad and the Efficient : Productivity, efficiency and technical change in the Airline Industry, 2004:2008

This study models the joint production of desirable and undesirable output production (that is, CO2 emissions) of airlines. The Malmquist-Luenberger productivity index is employed to measure productivity growth when undesirable output production is regulated and unregulated. The results show that pollution abatement activities of airlines lowers productivity growth which suggests the traditional approach of measuring productivity growth, which ignores CO2 emissions, overstate "true" productivity growth

Ex Ante Costs vs. Ex Post Costs of the Large Municipal Waste Combustor Rule

This paper compares EPA’s ex ante cost analysis of the large municipal waste combustor (MWC) rule to an ex post assessment of its cost. For our analysis of the MWC rule, we use plant-level data from the U.S. Department of Energy annual survey of pollution abatement expenditures by steam-electric power plants and from a survey of municipal waste combustor plants compiled by Government Advisory Associates. We find the ex post capital expenditures for nitrogen oxides control systems are typically lower than the EPA ex ante estimates, while ex post capital expenditures for mercury control systems tend to be higher than the EPA ex ante estimates. Finally, the comparison of ex post capital expenditures for particulate and sulfur dioxide control to ex ante capital costs are mixed. While a few plants are outliers when comparing the ratio of ex post capital costs to ex ante capital, the mean of the comparison across plants is near unity

Least-Cost Air Pollution Control: A CGE Joint Production Framework

Abstract This study proposes a new, more flexible approach to modeling pollution abatement activities within the CGE framework, one that treats the problem as an issue of the joint production of "good" and "bad" outputs. More specifically, this study employs a joint production technology to derive the production possibilities frontier for those industries producing both "good" and "bad" outputs. This avoids some of the difficulties associated with attempting to model separate technologies for production of the good output and pollution abatement activities. We demonstrate an application of the CGE model by estimating the cost associated with not pursuing least-cost strategies for abating air pollutants in the United States. 1 Throughout this study, the "good" output is the marketed output produced by an industry and the "bad" outputs are pollutants emitted by an industry

FäreRolfEconomicsTradablePermitsUnrealized.pdf

With the advent of tradable permit programs for bad outputs (e.g., SO₂ emissions); concerns arose over whether the theoretical gains from trade would be realized. We will employ a methodology that calculates the potential gains accruing to coal-fired electric power plants from implementing a tradable permit program. The magnitude of the potential gains in a plant's kilowatt hour output from a tradable permit program relative to its observed production provides insights into the existence of intertemporal allocative inefficiencies and spatial allocative inefficiencies after the implementation of a tradable permit program.Keywords: Joint production model, Tradable permits, SO₂ emission