Polluters and Abaters

32 Pages Posted: 5 Jan 2011

See all articles by Alain-Désiré Nimubona

Alain-Désiré Nimubona

Department of Economics, University of Waterloo & CIRANO

Bernard Sinclair-Desgagne

SKEMA Business School - Sophia Antipolis Campus

Date Written: July 6, 2010

Abstract

To comply with laws, regulations and social demands, polluting firms increasingly purchase the needed means from specialized suppliers. This paper analyzes this relatively recent phenomenon. We show how environmental regulation, the size of the output market, the elasticity of demand for abatement goods and services, and the fact that in-house and outsourced abatement expenses are substitutes or complements can influence a polluter’s make-or-buy decision. Specific features of abatement outsourcing are highlighted, qualifications and refinements of the theory of vertical integration are then proposed, and some consequences for environmental policy are briefly discussed.

Keywords: Eco-industry, Make-or-buy Decision, Outsourcing, Vertical Integration

JEL Classification: L23, L24, Q52

Suggested Citation

Nimubona, Alain-Désiré and Sinclair-Desgagne, Bernard, Polluters and Abaters (July 6, 2010). FEEM Working Paper No. 146.2010. Available at SSRN: https://ssrn.com/abstract=1734238 or http://dx.doi.org/10.2139/ssrn.1734238

Alain-Désiré Nimubona

Department of Economics, University of Waterloo & CIRANO ( email )

Waterloo, Ontario N2L 3G1
Canada

Bernard Sinclair-Desgagne (Contact Author)

SKEMA Business School - Sophia Antipolis Campus ( email )

60 rue Dostoïevski
Sophia Antipolis, 06902
France

Register to save articles to
your library

Register

Paper statistics

Downloads
42
Abstract Views
812
PlumX Metrics