Scandinavian Working Papers in Economics

CERE Working Papers,
CERE - the Center for Environmental and Resource Economics

No 2012:16: Pollution Generating Technologies and Environmental Efficiency

Rolf Färe (), Shawna Grosskopf (), Tommy Lundgren (), Per-Olov Marklund () and Wenchao Zhou ()
Additional contact information
Rolf Färe: Dept. of Economics, Postal: 319D Ballard Extension Hall, Oregon State University , Corvallis, OR 97331-3612, USA
Shawna Grosskopf: Dept. of Applied Economics, Postal: Ballard Hall 309, Oregon State University, Corvallis, Oregon , USA
Tommy Lundgren: CERE, Postal: Centre for Environmental and Resource Economics, , Dept. of Economics,, Umeå University, , Sweden
Per-Olov Marklund: CERE, Postal: Centre for Environmental and Resource Economics, , Dept. of Economics,, Umeå University, , Sweden
Wenchao Zhou: CERUM, Postal: Centre for Regional Science, , Umeå University, , Sweden

Abstract: technology. Pollutants, or bads, are explicitly modeled by imposing technology properties of disposability and null-jointness. With data on firms from Swedish manufacturing, we investigate the potential to reduce emissions, and we take a closer look at the pulp and paper sector. Dividing the firms into “brown” and “green” firms, we find that there is significant potential, in both categories, to improve environmental efficiency, and hence lower emissions, of three air pollutants. Furthermore, we suggest that treating biofuels as entirely carbon neutral (as is common practice) may underestimate environmental efficiency scores and generate misleading policy implications.

Keywords: Pollution; Environmental Efficiency

JEL-codes: D24; Q01; Q53

21 pages, September 28, 2012

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