Prevention or cure? Optimal abatement mix

Moriah Bostian (), Rolf Färe, Shawna Grosskopf and Tommy Lundgren
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Moriah Bostian: Lewis & Clark College
Rolf Färe: Oregon State University
Tommy Lundgren: Umeå University

Environmental Economics and Policy Studies, 2022, vol. 24, issue 4, No 2, 503-531

Abstract: Abstract We develop a model for pollution abatement that distinguishes between prevention and treatment technologies, in order to better understand the optimal mix of abatement measures. Our model separates the production process into two stages, an initial production and prevention stage and a final treatment (or cure) stage. We allow for reallocation of abatement investment across the production stages, in order to improve overall abatement and production and to better understand the tradeoffs between abatement measures. This framework is relevant in practice for numerous industrial production processes, including manufacturing and energy, which employ different abatement measures at different stages of production. In our application to Sweden’s pulp and paper sector, we find the industry could achieve further gains to both production and emissions reductions, beyond those estimated using more common single-stage technology estimation methods, by reallocating abatement investments. These results could be used to improve firm environmental management decisions, and to better target policy incentives to specific forms of abatement.

Keywords: Abatement; Production technology; Network model; Environmental investment; Emissions policy (search for similar items in EconPapers)
JEL-codes: C61 Q52 Q53 Q55 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s10018-021-00335-5

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