Axioms of a Polluting Technology: A Materials Balance Approach
Journal article, Peer reviewed
MetadataShow full item record
Original versionEnvironmental and Resource Economics. 2015, 67 (1), 1-22. 10.1007/s10640-015-9974-1
This paper aims to present an economic model characterized by a set of axioms that are consistent with the laws of thermodynamics. Two new axioms—weak G-disposability (i.e., weak directional disposability) and output essentiality—are introduced to satisfy the materials balance principle and the entropy law, respectively. The axiomatic production model is compared to other well-known production models that account for the joint production of good and bad outputs to illustrate the advantages of the new modeling approach.