Environmental efficiency, irreversibility and the shadow price of emissions

Assessing the production of goods and services while minimizing damage to environment is a key component advance sustainable development at national global levels. The nonparametric estimation lower upper bounds on shadow prices pollutants undertaken support design policies promoting environmental efficiency in presence asymmetry adjusting productive abatement capital capacity. This framework applied pulp paper sector 39 countries for 1996-2009, finds that USA, China Ireland are most environmentally inefficient sector. adjustment costs associated with net investment disinvestment found be asymmetric. For those nations where price CO2 than carbon tax, there still an opportunity abate emissions further. Results complementarity or substitutability between general inconclusive.