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Environmental Emissions and Production Economics: Implications of the Materials Balance
Author(s) -
Ebert Udo,
Welsch Heinz
Publication year - 2007
Publication title -
american journal of agricultural economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 1.949
H-Index - 111
eISSN - 1467-8276
pISSN - 0002-9092
DOI - 10.1111/j.1467-8276.2007.00997.x
Subject(s) - material balance , production (economics) , balance (ability) , function (biology) , marginal abatement cost , product (mathematics) , bounded function , economics , environmental science , natural resource economics , greenhouse gas , mathematics , microeconomics , process engineering , engineering , ecology , mathematical analysis , medicine , geometry , evolutionary biology , physical medicine and rehabilitation , biology
In modeling emissions, the literature has usually specified an explicit emission function, or treated emissions as a production input. We examine the validity of these approaches, taking into account the materials balance principle. We show that a technology can equivalently be described by (i) a production function with material and nonmaterial inputs and bounded marginal product of the material input, (ii) a well‐behaved production function with emissions as an input, and (iii) a well‐behaved emission function, if the materials balance is accounted for as an additional condition. We offer a forma derivation of common, but not rigorously established modeling approaches.