Seminar

In this seminar, a paper is presented that develops a framework for the representation of material flows in competitive equilibrium. Material balances track material flows which adjust endogenously to economic transactions. Negative environmental effects of resource extraction and waste deposition are assumed and it is shown that taxing resource extraction restores efficiency. Taxing waste only restores efficiency if producers minimize users’ costs of their products, or if there is a dense set of goods with varied material content. A general model structure is set up and then illustrated with a stylized 3-sector model. Finally, the model is applied to global steel and fossil fuel use.