Shadow Prices Of Emissions Research Articles

Environmental efficiency, irreversibility and the shadow price of emissions

Assessing the production of goods and services while minimizing the damage to the environment is a key component to advance sustainable development at national and global levels. The nonparametric estimation of lower and upper bounds on shadow prices of pollutants is undertaken to support the design of policies promoting environmental efficiency in the presence of asymmetry in adjusting productive and abatement capital capacity. This framework is applied to the pulp and paper sector of 39 countries for 1996-2009, and finds that the USA, China and Ireland are the most environmentally inefficient countries in the pulp and paper sector. The adjustment costs associated with net investment and disinvestment are found to be asymmetric. For those nations where the shadow price of CO2 is lower than the carbon tax, there is still an opportunity to abate emissions further. Results on complementarity or substitutability between pollutants are in general inconclusive.

Convex nonparametric least squares and stochastic semi-nonparametric frontier to estimate the shadow prices of PM2.5 and NOx for Taiwan’s transportation modes

With the growing environmental awareness, people are concerned about the air pollution issues because these issues not only cause adverse environmental effects but also damage human’s health conditions. Most of previous studies estimating the shadow prices of emissions mainly focused on stationary sources (e.g. coal-fired power plants) rather than mobile sources; however, traffic is one of critical emission sources. This paper uses convex nonparametric least squares (CNLS) and stochastic semi-nonparametric envelopment of data (StoNED) to estimate the shadow prices of PM2.5 and NOx for eleven transportation modes in seven air quality areas in Taiwan in 2013. We find that their shadow prices for two-stroke and four-stroke scooters are indifferent, and infer that it is unnecessary to develop different emissions policies for these transportation modes. However, the shadow prices for gas-fuelled vehicles which are relatively high and thus we suggest mandating advanced emissions technology or retrofits, or subsidies for electric vehicle replacements of this transportation mode. The significant distinctions in the corresponding shadow prices of PM2.5 and NOx we find for eleven transportation modes in Taiwan’s seven air quality areas indicate that policy-makers and regulators consider a variety of mitigation approaches.

The Price of Pollution? A Distance Function Approach to Valuing Multiple Pollutants in China

ABSTRACT To achieve green development, the Chinese government has taken a number of steps to reduce pollution. Several provinces of China thereby are implementing pilot pollution emission trading schemes. However, problems remain before establishing a nationwide pollution emission trading system, i.e., at what price do polluters acquire another emission allowance in the stage of initial quota allocation. In this context, shadow prices of emissions could provide the policymakers important information for the allowance prices. Besides, environmental protection policies often result in the reduction of several pollutants simultaneously. Thus, considering the provincial and sectoral significant differences in China, this paper employs a nonparametric output distance function approach including multiple undesirable outputs to estimate shadow prices of and at national level, provincial level and sectoral level. Our results suggest that multiple pollutants should be taken into account and shadow prices should be set differently at national, provincial and sectoral levels.

On Modeling Environmental Production Characteristics: A Slacks-Based Measure for China’s Poyang Lake Ecological Economics Zone

Environmental issues are currently of great concern, especially in the area of sustainable development. Thus, data envelopment analysis (DEA) has enjoyed much popularity, given its ability to measure environmental efficiency and shadow prices at the macro-economic level. In this study, we use the duality theory of slacks-based measure in DEA to develop a general procedure for modeling environmental production characteristics. By using the proposed methodology, we can measure environmental technical efficiency, the shadow prices of emissions, and inter-factor substitution possibilities. Further, we use the proposed methodology to carry out an empirical study of the Poyang Lake Ecological Economics Zone in China. Finally, we suggest some policy implications based on the study's empirical results.

중국 화력발전산업의 CO2암묵가격 및 잠재감축량, 연료에 대한 대체가능성 분석

China, the world`s largest producer, is likely to be obligated to reduce greenhouse gas emissions under the post-Kyoto protocol. This paper estimates a Shephard input distance function for the Chinese fossil-fueled power generation sector to measure the shadow price of emissions, technical efficiency, and indirect Morishima elasticities of substitution between inputs. Empirical results show that, on average, it costs approximately 3.2 US dollars per year to reduce emissions by one ton over the period 1981-2009. This finding indicates that Chinese power sector is expected to benefit from selling emission permits to other countries such as Korea and Japan, given that our estimate for China is lower than the ones previous literatures estimated for the power sector in these countries. The maximum attainable average reduction potential amounts to approximately 25 million tons per year by improving technical efficiency. Capital is substitutable with both coal and oil and capital is relatively more readily substituted for these fuels.