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Employment and Environmental Protection

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  • A. Markandya

Abstract

One of the most pressing problems in an economy intransition is that of unemployment. Hitherto the`costs' of this unemployment have either focused onthe value of the lost production, or on the costs tothe government of supporting the unemployed. From asocial viewpoint this is inappropriate. In this paper,we discuss the costs of unemployment in terms of theirimpacts on human welfare, particularly the healtheffects. On the positive side, as inefficient industries areshut down and as production responds to marketpressures, wasteful government subsidies are reduced,as is the level of environmental pollution. Clearly,therefore, there is a trade-off between theenvironmental and economic benefits on the one handand the welfare costs of unemployment on the other.In this paper, a simple model is developed to analyzethis trade-off. A single firm has a short-runproduction function in which output is dependent onthe level of employment. The present position ischaracterized by `inefficiency' in that the firm ismaking a loss and overproduction is taking place.Environmental damage is a function of the level ofoutput. The efficient production point is known, asare the efficiency prices.The problem to be solved is to minimize the costs ofmoving to the efficient point. The papercharacterizes the efficient dynamic path and givessome illustrations of such a path for the coal sectorin Russia, for given values of the efficiency losses,the environmental costs of using coal and the costs ofunemployment. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • A. Markandya, 2000. "Employment and Environmental Protection," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 15(4), pages 297-322, April.
  • Handle: RePEc:kap:enreec:v:15:y:2000:i:4:p:297-322
    DOI: 10.1023/A:1008324810845
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    References listed on IDEAS

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    7. Lawrence H. Goulder, 1994. "Environmental Taxation and the "Double Dividend": A Reader's Guide," CESifo Working Paper Series 74, CESifo.
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    1. Tourkolias, C. & Mirasgedis, S., 2011. "Quantification and monetization of employment benefits associated with renewable energy technologies in Greece," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2876-2886, August.
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    3. Tourkolias, C. & Mirasgedis, S. & Damigos, D. & Diakoulaki, D., 2009. "Employment benefits of electricity generation: A comparative assessment of lignite and natural gas power plants in Greece," Energy Policy, Elsevier, vol. 37(10), pages 4155-4166, October.
    4. David Pearce & Phoebe Koundouri, 2004. "Regulatory assessment for chemicals: a rapid appraisal cost-benefit approach," DEOS Working Papers 0409, Athens University of Economics and Business.

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