1. Environmental efficiency, irreversibility and the shadow price of emissions
- Author
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Silva, Elvira and Magalhães, Manuela
- Subjects
Paper industry -- Environmental aspects -- Analysis ,Pollutants -- Environmental aspects -- Analysis ,Carbon taxes -- Analysis -- Environmental aspects ,Environmental protection -- Analysis -- Environmental aspects ,Business, general ,Business ,Business, international - Abstract
Keywords Environmental Efficiency; Shadow price of emissions; Marginal rate of transformation between emissions; Irreversible investment; DEA Highlights * An adjustment-cost directional output distance function is specified using DEA to investigate environmental inefficiency. * This framework is applied to the pulp and paper sector of 39 countries during 1996-2009. * USA, China, and Ireland are the most environmentally inefficient countries in the pulp and paper sector. * For those nations where the shadow price of CO.sub.2 is lower than the carbon tax, there is still an opportunity to abate emissions further. * Adjustment costs associated with net investment and disinvestment are found to be asymmetric Abstract Assessing the production of goods and services while minimizing the damage to the environment is a key component to advance sustainable development at national and global levels. The nonparametric estimation of lower and upper bounds on shadow prices of pollutants is undertaken to support the design of policies promoting environmental efficiency in the presence of asymmetry in adjusting productive and abatement capital capacity. This framework is applied to the pulp and paper sector of 39 countries for 1996-2009, and finds that the USA, China and Ireland are the most environmentally inefficient countries in the pulp and paper sector. The adjustment costs associated with net investment and disinvestment are found to be asymmetric. For those nations where the shadow price of CO.sub.2 is lower than the carbon tax, there is still an opportunity to abate emissions further. Results on complementarity or substitutability between pollutants are in general inconclusive. Author Affiliation: (a) Faculty of Economics & Center for Economics and Finance, University of Porto, Porto, PT, Portugal (b) Department of Economic Theory and Economic History, University of Málaga, Spain, and CEFAGE, Portugal * Corresponding author. Article History: Received 25 June 2019; Accepted 8 August 2022 (footnote) The authors are grateful to Spiro Stefanou for his helpful comments on earlier versions of this manuscript. Byline: Elvira Silva (a), Manuela Magalhães [mane.magalhaes@gmail.com] (b,*)
- Published
- 2023
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