Manufacturing and corporate environmental responsibility: cost implications of voluntary waste minimisation

Issues of waste generation and its environmental implications raise questions about firms’ responsibilities. Waste reduction from either regulations or voluntary action is costly to firms, whether accomplished by “end of pipe” or process solutions. We evaluate county-level cost and waste generation patterns in UK manufacturing, using a cost function including waste as a “bad output,” to estimate overall, input-specific, and marginal production costs of waste reduction. On average we find significant waste reduction costs, from increased intermediate materials use but lower labour and capital demand. We also find variations in input use patterns among county types with different industry composition.