1 / 13

ECON 4910 Spring 2007 Environmental Economics Lecture 4, Chapter 7 -9

ECON 4910 Spring 2007 Environmental Economics Lecture 4, Chapter 7 -9. Lecturer: Finn R. Førsund. Options for reducing generation of pollutants. Reduced activity level Substitution among inputs Change of production technology Reducing use of material inputs Changing types of inputs

jael-glenn
Download Presentation

ECON 4910 Spring 2007 Environmental Economics Lecture 4, Chapter 7 -9

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. ECON 4910 Spring 2007 Environmental Economics Lecture 4, Chapter 7 -9 Lecturer: Finn R. Førsund Environmental Economics

  2. Options for reducing generation of pollutants • Reduced activity level • Substitution among inputs • Change of production technology • Reducing use of material inputs • Changing types of inputs • Reusing residuals • Add-on purification • Recirculation of residuals • Relocalisation of activities Environmental Economics

  3. Introducing Pigou tax • Competitive market, disregarding determination of output, tax t on emission • The firm: minimising purification costs • First-order condition • Generalises directly to many firms Environmental Economics

  4. Illustration of Pigou tax -c’, D’ D’ -c’ t e D’=0 emin eo e* Environmental Economics

  5. Illustration of Pigou tax with two firms -c’, D’ D’ -c2’ -c1’ t e D’=0 e* e2o Environmental Economics

  6. Subsidy • The firm’s optimisation problem • The first order condition • Control of eo, dynamic effects Environmental Economics

  7. Illustration of Pigou subsidy -c’, D’ D’ -c’ s e D’=0 emin eo e* Environmental Economics

  8. Spatial model of the environment • ei = secondary emission vector from producer i • eki = secondary or remaining discharge of pollutant (after purification) of type k from source i • Msj = environmental service of type s measured by indicator at receptor j Environmental Economics

  9. Illustration of spatial dimension • Spatial configuration: transport from source to receptor • Key variable: transfer coefficient aij Transfer coefficient Source (Point, Mobile, Diffuse) akij Environmental receptor Environmental Economics

  10. Introducing transfer coefficients • akij= amount of pollutant type k per unit generated by source i ending up in receptor j • eki = discharge of pollutant (after purification) of type k from source i • Msj= environmental service of type s measured by indicator at receptor j Environmental Economics

  11. Non-uniform dispersion of pollutants • The impact of one unit of pollutant k from a source i depends on the location expressed by the transfer coefficient • A damage function for each environmental receptor has to be specified • Using Pigou tax on pollutants at source implies that each source must have an individual tax rate Environmental Economics

  12. The spatial model with many firms • The social planning problem • Esj: monetary evaluation of environmental sevice s provided by environmental receptor j • Simplifying to one receptor, one environmental service, one type of pollutant Environmental Economics

  13. The social optimisation problem • First-order conditions • The optimal Pigou tax Environmental Economics

More Related