The Technology of Pollution Avoidance by Firms

Robert E Kohn

Public Finance = Finances publiques, 1987, vol. 42, issue 3, 384-94

Abstract: The technology of avoidance is examined in the context of a general equilibrium model of production. To reduce their exposure to pollution, it is assumed that firms require more inputs for avoidance the larger their output and, following H. Shibata and J. S. Winrich (1983), more inputs for avoidance the lower the pollutant concentration. The former assumption has the consequence that firms may operate under increasing returns to scale. The latter assumption, in the extreme, could imply a special case in which the efficient tax on emissions is negative, that is, a subsidy. This extreme case is ruled out by chemical principles.

Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:pfi:pubfin:v:42:y:1987:i:3:p:384-94

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