Environmental Regulation and Technological Constraint

환경규제와 기술제약 -한국지역제조업을 중심으로-

The purpose of this paper is to measure the change of the production efficiency which may happen when environmental regulation incurs technological constraint in the process of production, and to compute the opportunity cost of pollution reduction with the lost products based on the change of efficiency. The patterns of production technoloy in the paper are divided into the technologies of strong disposability and weak disposabilty to grasp the effect of the technological constraint due to the environmental regulation. The endowment of the technolgical constraints in the process of production is considered to bring the greatest restriction on firm's production. When the environmental efficiencies of Korean regional manufactures were measured with linear programming model, the lost products related with the constraint of production technology that environmental regulation incurred, was average 148.1 billion dollar per year(5.87% of one year overall products) for total manufactures in 1991~1998. The ratio of the lost products for total products was spread from 0.78% to 1l.08%. The average lost products of 15 regions were changed from 4.66% to 18.35% of total products. Generally the environmental efficiency index of regional manufactures being decreased continuously since 1991, it is estimated that the environmental performance of Korean manufactures has been more and more deteriorating.