December 19, 2010

Polluters and Abaters

by Alain-Désiré Nimubona and Bernard Sinclair-Desgagné

- 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.

Nimubona, A-D and B. Sinclair-Desgagné (2010). "Polluters and Abaters." FEEM Note di lavoro No. 2010.146, Jul 2010.