Dissecting environmental efficiency: The role of technology adoption and usage

Filippo Belloc () and Edilio Valentini

Journal of Economic Behavior & Organization, 2024, vol. 228, issue C

Abstract: How could firms best reduce their environmental impact? Should they change technology? Or could they do better with what they already have? This paper shows that one size does not fit all. We analyse a sample of polluting production plants (i.e. installations) regulated under the EU Emission Trading System. We employ a mixture model estimation to dissect environmental efficiency into a technology adoption component (what type of technology is used) and a technology usage component (how a technology is used). Our installation-level analysis shows that the share of installations adopting frontier technologies is about 21%. We also find that the average environmental efficiency gains that installations could reach by improving technology adoption and technology usage are 75% and 80% respectively. The analysis of balance-sheet data on parent companies reveals that better environmental technologies are adopted by larger, listed, multi-installation and international companies, while older firms and firms with higher intangible assets intensity more commonly show improved technology usage.

Keywords: Environmental efficiency; Technology adoption; Technology usage; Mixture models (search for similar items in EconPapers)
JEL-codes: D24 L60 Q55 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jeborg:v:228:y:2024:i:c:s0167268124003901

DOI: 10.1016/j.jebo.2024.106776

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