The inverted pyramid: A neo-Ricardian view on the economy–environment relationship

Kemp-Benedict, Eric

doi:10.1016/j.ecolecon.2014.08.012

Cited by 12 publications

(3 citation statements)

References 82 publications

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“…Enhancing product quality enables firms to mitigate transaction uncertainty stemming from information asymmetry, thereby influencing the firm’s bargaining power within the market. The theory of endogenous decision-making quality posits that enhancements in product quality may yield varying effects on both product prices and production costs, thereby influencing the pricing capabilities of high-carbon enterprises within the context of carbon emissions trading policies [ 27 ]. This perspective underscores the relationship between product quality and pricing strategies employed by high-carbon enterprises.…”

Section: Literature Review and Theoretical Hypothesesmentioning

confidence: 99%

Can carbon emissions trading policy promote product bargaining power increases for high-carbon enterprises? Evidence from China

Wang,

2024

PLoS ONE

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Carbon emissions trading policies play a crucial role in facilitating the transition to high-end products within high-carbon enterprises. Nevertheless, current empirical analyses of the carbon emissions trading market exhibit a lack of precision and are susceptible to bias in their findings. Limited research has been conducted on the influence of product quality as a potential constraint on the impact of carbon trading on product bargaining power. This study presents a double-difference model utilizing data on emission-control enterprises in China’s carbon market to examine the influence of the carbon emissions trading mechanism on the bargaining power of high-carbon products. Empirical analysis is conducted using financial data from listed companies in China spanning the years 2010 to 2020. The findings indicate that the implementation of carbon emissions trading policies has a dampening impact on the product bargaining power of high-carbon enterprises. Moreover, carbon emissions trading policies have heterogeneous effects on the product bargaining power of high-carbon firms with different life cycles, with mature high-carbon firms receiving a boost and declining high-carbon firms receiving a dampening effect. Mechanism test finds that the incomplete transmission effect of cost shocks resulting from carbon emissions trading policies has negatively affect the product bargaining power of high-carbon enterprises. Further research finds that product quality is a key factor in determining the effect of the carbon emissions trading policy, and that the impact of the carbon emissions trading policy on the bargaining power of products of high-carbon firms takes on a "U" shape due to product quality. Once the product quality exceeds the bottleneck value of 0.5956, the policy significantly increases the bargaining power of products. The study confirms that the establishment of carbon markets can effectively increase the bargaining power of superior products. These results offer a comprehensive theoretical and practical foundation for nations to advance the development of carbon markets and facilitate the achievement of sustainable development by high-carbon enterprises.

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Section: Literature Review and Theoretical Hypothesesmentioning

confidence: 99%

Can carbon emissions trading policy promote product bargaining power increases for high-carbon enterprises? Evidence from China

Wang,

2024

PLoS ONE

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“…Through empirical studies, Jorgenson [ 7 ] believes that both the theories have some defects in explaining the structural relationship between economic development and environmental hazards, which need to be further improved to comprehensively explain the dynamic economic development and its environmental impact. Kemp-Benedict [ 8 ] used the new Ricardian model to prove the inverted pyramid relationship between the economy and environment, that is, natural resources that may only account for a small proportion of GDP have constituted the bottom of the inverted pyramid, while other parts of the economy have been distributed at the top of the pyramid. Other scholars from Europe [ 9 ], the United States [ 10 ], Singapore [ 11 ], Tanzania [ 12 ], Pakistan [ 13 ] and other countries and regions have carried out studies and found that the improvement of environmental quality in the future would be highly related to economic structure, and an optimized relationship between the economy and environment would be of great help to sustainable development.…”

Section: Literature Reviewmentioning

confidence: 99%

The Coupling Synergy Effect of Economic and Environment in Developed Area: An Empirical Study from the Yangtze River Delta Urban Agglomeration in China

Yin

2022

IJERPH

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Coordination between economic development (ED) and ecological environment (EE) is an important challenge for high-quality urban development. Taking the panel data related to the ED and EE of the Yangtze River Delta urban agglomeration (YUA) from 2009 to 2019 as the research objective, the evaluation system of ED and EE was constructed by introducing the coupling coordination degree model and the gray correlation degree model to analyze their development indices, coupling coordination degree and gray correlation degree in two spatial and temporal dimensions. Research results: (1) The ED indexes and EE indexes of the 26 cities in the YUA have obvious differences in different cities, and there is no synergy between the two indices. (2) The coupling coordination degree of the YUA shows a pattern of high in the east and low in the west, high in the center and low in the north and south in space, and an overall increasing trend in time. (3) In terms of gray correlation, the correlation between ED quality dimension and EE level dimension is the highest. According to the conclusion, when both the economy and environment present consistency at a high level, it will help the city’s economy to develop more efficiently and rapidly.

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“…Herman Daly portrayed the economy as an "inverted pyramid", a vast and complex structure of human activities balanced on a narrow input of natural resources (Daly, 1995;Kemp-Benedict, 2014). As the raw materials embedded in intermediate products progress from extraction, to processing, to manufacture, to wholesale, to retail and final consumption, firms combine those products with labor and capital to create an expanding array of valued goods and services (Ayres and Warr, 2010).…”

Section: Introductionmentioning

confidence: 99%

Looking for the Inverted Pyramid: An Application Using Input-Output Networks

Cahen-Fourot

Campiglio

Dawkins

et al. 2020

Ecological Economics

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The inverted pyramid: A neo-Ricardian view on the economy–environment relationship

Cited by 12 publications

References 82 publications

Can carbon emissions trading policy promote product bargaining power increases for high-carbon enterprises? Evidence from China

Can carbon emissions trading policy promote product bargaining power increases for high-carbon enterprises? Evidence from China

The Coupling Synergy Effect of Economic and Environment in Developed Area: An Empirical Study from the Yangtze River Delta Urban Agglomeration in China

Looking for the Inverted Pyramid: An Application Using Input-Output Networks

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