Environmental performance and equilibrium

Thierry Bréchet and Philippe Michel

Canadian Journal of Economics, 2007, vol. 40, issue 4, 1078-1099

Abstract: In this paper we show why firms' or industries' rankings in terms of environmental performance depend not only on the technology but also on market equilibrium. Between two industries committed to the same environmental constraint, the more eco-efficient is the one with the higher output level. By comparing industries and firms, we show that the rankings are not robust, for they are affected by market outcome. The role of eco-efficiency in firms' profitability in equilibrium is also scrutinized. All this shows that the usual eco-efficiency indicators are inadequate. To tackle this problem, we propose a sound indicator.

JEL-codes: D20 Q50 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (9)

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Journal Article: Environmental performance and equilibrium (2007)
Working Paper: Environmental performance and equilibrium (2007)
Working Paper: Environmental performance and equilibrium (2004)
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