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Measuring the CO2 shadow price for wastewater treatment: A directional distance function approach.
- Source :
-
Applied Energy . Apr2015, Vol. 144, p241-249. 9p. - Publication Year :
- 2015
-
Abstract
- The estimation of the value of carbon emissions has become a major research and policy topic since the establishment of the Kyoto Protocol. The shadow price of CO 2 provides information about the marginal abatement cost of this pollutant. It is an essential element in guiding environmental policy issues, since the CO 2 shadow price can be used when fixing carbon tax rates, in environmental cost-benefit analysis and in ascertaining an initial market price for a trading system. The water industry could play an important role in the reduction of greenhouse gas (GHG) emissions. This paper estimates the shadow price of CO 2 for a sample of wastewater treatment plants (WWTPs), using a parametric quadratic directional distance function. Following this, in a sensitivity analysis, the paper evaluates the impact of different settings of directional vectors on the shadow prices. Applying the Mann–Whitney and Kruskal–Wallis non-parametric tests, factors affecting CO 2 prices are investigated. The variation of CO 2 shadow prices across the WWTPs evaluated argues in favour of a market-based approach to CO 2 mitigation as opposed to command-and-control regulation. The paper argues that the estimation of the shadow price of CO 2 for non-power enterprises can provide incentives for reducing GHG emissions. [ABSTRACT FROM AUTHOR]
Details
- Language :
- English
- ISSN :
- 03062619
- Volume :
- 144
- Database :
- Academic Search Index
- Journal :
- Applied Energy
- Publication Type :
- Academic Journal
- Accession number :
- 101924890
- Full Text :
- https://doi.org/10.1016/j.apenergy.2015.02.034