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Policy design and technological substitution: Investigating the REACH regulation in an agent-based model

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  • Arfaoui, Nabila
  • Brouillat, Eric
  • Saint Jean, Maïder

Abstract

This article proposes an agent-based model to study the impact of the European regulation REACH on industrial dynamics. This new regulation was adopted in 2006 and establishes a new philosophy of how to design environmental protection and health, especially through the authorization process and the extended producer responsibility. The main contribution of this article is to investigate how different combinations of flexible and stringent mechanisms create the incentives and constraints to shape market selection and innovation. The model outcomes stress that (1) stringency is the most determining feature of policy design (timing is also decisive but it appears to be of secondary importance); (2) technology substitution that brings radical technological change and significant pollution reduction is possible only if regulation is stringent enough but after many sacrifices, especially in terms of market concentration and number of failures; and (3) soft regulation does not lead to technology transition because of weak incentive and selection effects.

Suggested Citation

  • Arfaoui, Nabila & Brouillat, Eric & Saint Jean, Maïder, 2014. "Policy design and technological substitution: Investigating the REACH regulation in an agent-based model," Ecological Economics, Elsevier, vol. 107(C), pages 347-365.
    • Handle: RePEc:eee:ecolec:v:107:y:2014:i:c:p:347-365
    DOI: 10.1016/j.ecolecon.2014.08.013
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    1. Nabila Arfaoui & Eric Brouillat & Maïder Saint Jean, 2015. "Credibility of the REACH Regulation: Lessons Drawn from an ABM. WWWforEurope Working Paper No. 92," WIFO Studies, WIFO, number 58133, February.
    2. Nabila Arfaoui & Eric Brouillat & Maïder Saint-Jean, 2015. "The Impact of REACH on Eco-Innovation: How Perception Misfits on Policy Stringency Matter," GREDEG Working Papers 2015-45, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), Université Côte d'Azur, France.
    3. Hongjun Guan & Zhen Zhang & Aiwu Zhao & Shuang Guan, 2019. "Simulating Environmental Innovation Behavior of Private Enterprise with Innovation Subsidies," Complexity, Hindawi, vol. 2019, pages 1-12, May.
    4. Brouillat, Eric & Saint Jean, Maïder, 2020. "Mind the gap: Investigating the impact of implementation gaps on cleaner technology transition," Technological Forecasting and Social Change, Elsevier, vol. 158(C).
    5. Eric Brouillat & Maïder Saint-Jean, 2019. "Dura lex sed lex: why implementation gaps in environmental policy matter?," Cahiers du GREThA (2007-2019) 2019-04, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    6. Befort, N., 2021. "The promises of drop-in vs. functional innovations: The case of bioplastics," Ecological Economics, Elsevier, vol. 181(C).
    7. Eric Brouillat & Maïder Saint Jean, 2020. "Mind the gap: Investigating the impact of implementation gaps on cleaner technology transition," Post-Print hal-03490256, HAL.
    8. Dewick, Paul & Maytorena-Sanchez, Eunice & Winch, Graham, 2019. "Regulation and regenerative eco-innovation: the case of extracted materials in the UK," Ecological Economics, Elsevier, vol. 160(C), pages 38-51.
    9. Morello, Thiago Fonseca & Parry, Luke & Markusson, Nils & Barlow, Jos, 2017. "Policy instruments to control Amazon fires: A simulation approach," Ecological Economics, Elsevier, vol. 138(C), pages 199-222.
    10. Thomas Ankenbrand & Fabian Kostadinov & Faten Ben Bouheni & Mondher Bellalah, 2020. "Cyclical behaviour of the Swiss real estate market," International Journal of Entrepreneurship and Small Business, Inderscience Enterprises Ltd, vol. 39(1/2), pages 71-99.

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