UK’s climate change levy and emissions trading scheme: implications for businesses’ productivity and economic efficiency

Adarsh Varma ()
Additional contact information
Adarsh Varma: The University of Hull Business School

A chapter in Emissions Trading and Business, 2006, pp 313-326 from Springer

Abstract: Abstract This paper sets out a theoretical model to analyse the effect of UK’s climate change levy (CCL) and the emissions trading scheme (ETS) on the productivity and overall economic efficiency of businesses. A microeconomic analysis at plant level enables us to understand the implications of compliance cost for the overall cost structure of the plant. Some of the dynamics of an economic instrument can be lost at an aggregate level. We will use a stochastic translog frontier cost function with a cost inefficiency component to analyse whether the two instruments affect the overall economic efficiency of the firm. The model allows for factor substitution to take into account changes in relative factor prices, which can reduce the perceived adverse effects of the two instruments on productivity and efficiency of plants. The paper also briefly outlines the implications for the cost function due to some of the key developments since their inception in 2001 (CCL) and 2002 (ETS).

Keywords: Energy taxes; emissions trading; cost efficiency; stochastic frontiers (search for similar items in EconPapers)
Date: 2006
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-7908-1748-5_21

Ordering information: This item can be ordered from
http://www.springer.com/9783790817485

DOI: 10.1007/3-7908-1748-1_21

Access Statistics for this chapter

More chapters in Springer Books from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().