1 / 7

Incorporating the non-separability concept of production, pollution and abatement in sector models

Incorporating the non-separability concept of production, pollution and abatement in sector models. Jef Van Meensel Centre for Agricultural Economics. Introduction. Incorporating environmental effects in sector modelling: Extend private economic view Basics for internalization experiments

drea
Download Presentation

Incorporating the non-separability concept of production, pollution and abatement in sector models

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Incorporating the non-separability concept of production, pollution and abatement in sector models Jef Van Meensel Centre for Agricultural Economics

  2. Introduction • Incorporating environmental effects in sector modelling: • Extend private economic view • Basics for internalization experiments • Contents: • Evolution of theoretical thinking • Translation of theoretical concepts to sector modelling

  3. Conventional theory • Production and emission are separable • Strict joint production (fixed proportions) Production X → Y Emission Y→ B TB Y (c) (b) (a) B

  4. New theoretical paradigm • Production & emission: to be treated as non-separable • (Y, B) = f(X) (joint inputs) • (Y, B) =f(X1,…,Xn) (input substitution) • Generalized joint production • Proportion of good and bad outputs to be varied • Rearrangement of productive inputs to counter externalities • Three consecutive steps to environmentally sound production (Hill et al, 1999) • Efficiency improvements • Input substitution • Output reduction Use of new technologies

  5. Graphical representation Y MAC Efficiency improvement Input substitution New technologies Reduction Y New technologies Input substitution at private cost Proportional reduction Y and B B B reduction Weakly disposable Strongly disposable Input substitution Efficiency improvement

  6. Translation to sector modelling • Conventional theory • B = f(aY) • New theoretical paradigm • Production function Y = g(X) • Objective function Z = p[g(X)] • Externality B = h[g(X)]

  7. Conclusion • Two challenges: • Theoretical: clear linkage between concepts of joint production, disposability and separability • Practical: include different steps to environmentally sound production in sector model

More Related