Prevention or cure? Abatement efficiency in a network technology

Abstract

We develop a network model for pollution abatement that distinguishes between prevention and treatment technologies. 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 efficiency and 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 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.

About the presenter's visit

Professor Fare and Professor Grosskof will be visiting the School of Economics on 4.11.19-29.11.19. While here they will be using room 636 Colin Clark Building. If you would like to meet with them or have lunch or dinner with them please contact A/Prof Valentin Zelenyuk who will be their host while at The University of Queensland. A/Prof Zelenyuk can be contacted on v.zelenyuk@uq.edu.au.