IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v51y2003i1p1-16.html
   My bibliography  Save this article

Policy Model for Pollution Control in the Copper Industry, Including a Model for the Sulfuric Acid Market

Author

Listed:
  • René Caldentey

    (Stern School of Business, New York University, New York, New York 10012 and Department of Industrial Engineering, University of Chile, Santiago, Chile)

  • Susana Mondschein

    (Department of Industrial Engineering, University of Chile, Santiago, Chile, and Yale School of Management, 135 Prospect Street, P.O. Box 20820, New Haven, Connecticut 06520-8200)

Abstract

In this paper we develop a policy model for pollution control investment and operational decisions in the copper industry. The system consists of (i) a nonlinear integer model to optimize smelter operations, including the investment decisions relating to smelting capacity and pollution control plants that complies with environmental regulations, and (ii) a network flow model to describe the economic behavior of the sulfuric acid market, which considers the sulfuric acid produced at the pollution abatement stages in the smelting process. This second model solves for an equilibrium among spatially separated markets, that determines the price and distribution of acid in each demand and supply region. The two models interact through the input each receives from the other. Thus, the smelter model uses the sulfuric acid price at each smelter to find optimal operational and investment decisions, whereas the sulfuric acid market model considers sulfuric acid output at the smelters as part of the supply input to find the price of this product at each smelter location. The solution given by the policy model is the global equilibrium obtained when this iterative process between the two models converges. Thus, the price of the sulfuric acid, which is the central component when deciding when and where to locate a sulfuric acid plant, is determined endogenously, rather than assumed exogenous as in most models of this type. Computational experiments show that expected profits associated with the copper industry can increase significantly when the problem is solved in aggregate, as compared with the smelters making their decisions independently. Several applications of the policy model are described.

Suggested Citation

  • René Caldentey & Susana Mondschein, 2003. "Policy Model for Pollution Control in the Copper Industry, Including a Model for the Sulfuric Acid Market," Operations Research, INFORMS, vol. 51(1), pages 1-16, February.
    • Handle: RePEc:inm:oropre:v:51:y:2003:i:1:p:1-16
    DOI: 10.1287/opre.51.1.1.12797
    as

    Download full text from publisher

    File URL: http://dx.doi.org/10.1287/opre.51.1.1.12797
    Download Restriction: no
    File URL: https://libkey.io/10.1287/opre.51.1.1.12797?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Harvey J. Greenberg & Frederic H. Murphy, 1985. "Computing Market Equilibria with Price Regulations Using Mathematical Programming," Operations Research, INFORMS, vol. 33(5), pages 935-954, October.
    2. Simon J. Evenett & Wolfgang Keller, 2002. "On Theories Explaining the Success of the Gravity Equation," Journal of Political Economy, University of Chicago Press, vol. 110(2), pages 281-316, April.
    3. Thomas E. Baker & Leon S. Lasdon, 1985. "Successive Linear Programming at Exxon," Management Science, INFORMS, vol. 31(3), pages 264-274, March.
    4. Frederic H. Murphy & Murthy V. Mudrageda, 1998. "A Decomposition Approach for a Class of Economic Equilibrium Models," Operations Research, INFORMS, vol. 46(3), pages 368-377, June.
    5. Susana V. Mondschein & Ariel Schilkrut, 1997. "Optimal Investment Policies for Pollution Control in the Copper Industry," Interfaces, INFORMS, vol. 27(6), pages 69-87, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Charles J. Corbett & Robert D. Klassen, 2006. "Extending the Horizons: Environmental Excellence as Key to Improving Operations," Manufacturing & Service Operations Management, INFORMS, vol. 8(1), pages 5-22, March.
    2. Siemon, Michel & Schiffer, Maximilian & Walther, Grit, 2021. "Integrated purchasing and production planning for a non-Ferrous metal production network," Omega, Elsevier, vol. 98(C).
    3. Nicola Secomandi, 2010. "On the Pricing of Natural Gas Pipeline Capacity," Manufacturing & Service Operations Management, INFORMS, vol. 12(3), pages 393-408, October.
    4. Jianzhong Xiao & Xiaolin Wang & Ran Wang, 2016. "Research on Factors Affecting the Optimal Exploitation of Natural Gas Resources in China," Sustainability, MDPI, vol. 8(5), pages 1-13, May.
    5. Foo, Nam & Bloch, Harry & Salim, Ruhul, 2018. "The optimisation rule for investment in mining projects," Resources Policy, Elsevier, vol. 55(C), pages 123-132.
    6. Tang, Christopher S. & Zhou, Sean, 2012. "Research advances in environmentally and socially sustainable operations," European Journal of Operational Research, Elsevier, vol. 223(3), pages 585-594.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Frederic Murphy & Axel Pierru & Yves Smeers, 2016. "A Tutorial on Building Policy Models as Mixed-Complementarity Problems," Interfaces, INFORMS, vol. 46(6), pages 465-481, December.
    2. Foo, Nam & Bloch, Harry & Salim, Ruhul, 2018. "The optimisation rule for investment in mining projects," Resources Policy, Elsevier, vol. 55(C), pages 123-132.
    3. Jianzhong Xiao & Xiaolin Wang & Ran Wang, 2016. "Research on Factors Affecting the Optimal Exploitation of Natural Gas Resources in China," Sustainability, MDPI, vol. 8(5), pages 1-13, May.
    4. Thomas L. Vollrath & Mark J. Gehlhar & Charles B. Hallahan, 2009. "Bilateral Import Protection, Free Trade Agreements, and Other Factors Influencing Trade Flows in Agriculture and Clothing," Journal of Agricultural Economics, Wiley Blackwell, vol. 60(2), pages 298-317, June.
    5. Jeffrey H. Bergstrand & Scott L. Baier, 2010. "An Evaluation of Swiss Free Trade Agreements Using Matching Econometrics," Aussenwirtschaft, University of St. Gallen, School of Economics and Political Science, Swiss Institute for International Economics and Applied Economics Research, vol. 65(3), pages 239-250, September.
    6. Pedro E. Moncarz, 2010. "Determinantes del comercio de servicios financieros Potencial de exportaciones para los países sudamericanos," Documentos de trabajo 2010019, Banco Central del Uruguay.
    7. Virag-Neumann, Ildiko, 2015. "Impacts of EU Enlargement Process: A Gravity Model Approach," Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference (2015), Kotor, Montengero, in: Proceedings of the ENTRENOVA - ENTerprise REsearch InNOVAtion Conference, Kotor, Montengero, 10-11 September 2015, pages 453-460, IRENET - Society for Advancing Innovation and Research in Economy, Zagreb.
    8. Bo Xiong & John Beghin, 2017. "Disentangling Demand-Enhancing And Trade-Cost Effects Of Maximum Residue Regulations," World Scientific Book Chapters, in: John Christopher Beghin (ed.), Nontariff Measures and International Trade, chapter 6, pages 105-108, World Scientific Publishing Co. Pte. Ltd..
    9. Marco Dueñas & Giorgio Fagiolo, 2013. "Modeling the International-Trade Network: a gravity approach," Journal of Economic Interaction and Coordination, Springer;Society for Economic Science with Heterogeneous Interacting Agents, vol. 8(1), pages 155-178, April.
    10. Roberta De Santis, 2012. "Impact of Environmental Regulations on Trade in the Main EU Countries: Conflict or Synergy?," The World Economy, Wiley Blackwell, vol. 35(7), pages 799-815, July.
    11. Ageliki Anagnostou & Ioannis Panteladis & Maria Tsiapa, 2015. "Disentangling different patterns of business cycle synchronicity in the EU regions," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 42(3), pages 615-641, August.
    12. Gutiérrez, Gabriel, 2005. "Ex-post evaluation of the employment effects of a preferential trade agreement: methodological issues, illustrated with a reference to Chile," Comercio Internacional 4399, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    13. repec:ilo:ilowps:369300 is not listed on IDEAS
    14. Jungnickel, Rolf & Borrmann, Christine & Keller, Dietmar, 2005. "What gravity models can tell us about the position of German FDI in Central and Eastern Europe," HWWA Discussion Papers 328, Hamburg Institute of International Economics (HWWA).
    15. Christophe Rault & Robert Sova & Ana Maria Sova, 2009. "Modelling international trade flows between CEEC and OECD countries," Applied Economics Letters, Taylor & Francis Journals, vol. 16(15), pages 1547-1554.
    16. Felipa de Mello-Sampayo, 2017. "Competing-destinations gravity model applied to trade in intermediate goods," Applied Economics Letters, Taylor & Francis Journals, vol. 24(19), pages 1378-1384, November.
    17. Paas, Tiiu, 2002. "Gravity Approach for Exploring Baltic Sea Regional Integration in the Field of International Trade," Discussion Paper Series 26379, Hamburg Institute of International Economics.
    18. Gil-Pareja, Salvador & Llorca-Vivero, Rafael, 2017. "El comercio exterior de España y el proceso de Integración Europea /The Foreign trade of Spain and the European Integration Process," Estudios de Economia Aplicada, Estudios de Economia Aplicada, vol. 35, pages 63-84, Enero.
    19. Heejoon Kang & Michele Fratianni, 2006. "International Trade Efficiency, the Gravity Equation, and the Stochastic Frontier," Working Papers 2006-08, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    20. Andre Jungmittag & Paul Welfens, 2009. "Liberalization of EU telecommunications and trade: theory, gravity equation analysis and policy implications," International Economics and Economic Policy, Springer, vol. 6(1), pages 23-39, June.
    21. Lucian Cernat, 2001. "ASSESSING REGIONAL TRADE ARRANGEMENTS: ARE SOUTH–SOUTH RTAs MORE TRADE DIVERTING?," International Trade 0109001, University Library of Munich, Germany.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:oropre:v:51:y:2003:i:1:p:1-16. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.