Environmental Policy and Economies of Scope in Facility-Level Environmental Practices
53 Pages Posted: 30 Nov 2007
Date Written: January 25, 2007
In order to abate pollution manufacturing facilities can either change their production processes or introduce end-of-pipe technologies. The decision to undertake CPP rather than EOP is a reflection of the existence of economies of scope between production of the facility's conventional output and abatement of pollution. While this id determined by sectoral technological opportunities, facility size and other factors, environmental management practices and public policy also play a role. Our results suggest that flexible instruments are more likely to result in CPP. We also provide insights on the role of environmental management within the firm.
Keywords: economies of scope, environmental policy, environmental management, technological innovation
JEL Classification: M11, M14, Q52, Q55, Q58, 033
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