A theoretical measure of environmental efficiency

Pierre-André Jouvet, Philippe Michel and Gilles Rotillon
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Gilles Rotillon: THEMA

Cahiers de la Maison des Sciences Economiques from Université Panthéon-Sorbonne (Paris 1)

Abstract: We study, in a simple model, the partial equilibrium of an industry with n firms endowed by different technologies which have different pollution effects. The price of input (labour) and the demand curve to the industry are given. Pollution is restricted by a tradable market of permits in the industry. We define an environmental efficiency factor for each firm. Given the total dotation of permits, the larger is the environmental efficiency factor, the larger is the firm's contribution to total production. To study the long run efficiency, we explicit the role of capital in production and obtain a proportional environmental efficiency factor. Last, we analyze the consequences of permits' allocations on the profitability of the firms

Keywords: Environmental efficiency factor; environmental performance; indicators; market of permits; undesirable output (search for similar items in EconPapers)
JEL-codes: D2 D61 L19 Q28 (search for similar items in EconPapers)
Pages: 24 pages
Date: 2004-02
New Economics Papers: this item is included in nep-env and nep-res
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Working Paper: A theoretical measure of environmental efficiency (2003)
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Persistent link: https://EconPapers.repec.org/RePEc:mse:wpsorb:v04011

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