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Joint Production, Externalities, and the Regulation of Production Networks

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  • Stefan Baumgärtner
  • Frank Jöst

Abstract

Real production systems are often vertically integrated in thesense that one production process uses the unwanted joint product of another production process as input.This interrelationship links in a non-obvious way the different negative externalities stemming from theproduction processes. An empirical example is the sulphuric acid industry. Our model of a vertically integratedproduction system shows how internalising one currently existing externality may create another externalitywhich has thus far not been existent. We also discuss how environmental policy could deal with this problemwhen regulating integrated production systems. Copyright Kluwer Academic Publishers 2000

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  • Stefan Baumgärtner & Frank Jöst, 2000. "Joint Production, Externalities, and the Regulation of Production Networks," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 16(2), pages 229-251, June.
    • Handle: RePEc:kap:enreec:v:16:y:2000:i:2:p:229-251
    DOI: 10.1023/A:1008371502845
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    References listed on IDEAS

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    1. Armin Schmutzler, 1996. "Pollution control with imperfectly observable emissions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 7(3), pages 251-262, April.
    2. R. Devlin & R. Grafton, 1994. "Tradeable permits, missing markets, and technology," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 4(2), pages 171-186, April.
    3. Keeler, Emmett & Spence, Michael & Zeckhauser, Richard, 1972. "The optimal control of pollution," Journal of Economic Theory, Elsevier, vol. 4(1), pages 19-34, February.
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    Cited by:

    1. Estelle Malavolti & Marion Podesta, 2011. "Inclusion of the aviation sector into the emission trading scheme : an economic analysis," Post-Print hal-01022239, HAL.
    2. Estelle Malavolti & Julien Jenvrin, 2010. "Strategic reaction of airlines to the ETS," Post-Print hal-01022229, HAL.

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