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Incentives to diffuse advanced abatement technology under environmental liability law

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  • Endres, Alfred
  • Friehe, Tim

Abstract

Polluting firms with advanced abatement technology at their disposal have incentives or disincentives to share this technology with other polluting firms. The 'direction' and extent of those incentives depends on the liability rule applicable and the way technical change impacts marginal abatement costs. We establish that incentives for diffusion are socially optimal under strict liability and socially suboptimal under negligence if technical change lowers marginal abatement costs for all levels of abatement. Negligence may, however, induce better diffusion incentives than strict liability if technical change decreases (increases) marginal abatement costs for low (high) levels of abatement.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Environmental Economics and Management.

Volume (Year): 62 (2011)
Issue (Month): 1 (July)
Pages: 30-40

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Handle: RePEc:eee:jeeman:v:62:y:2011:i:1:p:30-40

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Web page: http://www.elsevier.com/locate/inca/622870

Related research

Keywords: Environmental liability law Emission abatement technology Diffusion;

References

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Citations

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Cited by:
  1. Alfred Endres & Tim Friehe, 2012. "Generalized Progress of Abatement Technology: Incentives Under Environmental Liability Law," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 53(1), pages 61-71, September.
  2. Sandrine SPAETER & Julien JACOB, 2014. "Large-scale risks and technological change: What about limited liability?," Working Papers of BETA 2014-10, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  3. Alfred Endres & Tim Friehe, 2014. "The reasonable person standard: trading off static and dynamic efficiency," European Journal of Law and Economics, Springer, vol. 37(2), pages 249-267, April.
  4. Alfred Endres & Tim Friehe, 2011. "The Monopolistic Polluter under Environmental Liability Law: Incentives for Abatement and R&D," CESifo Working Paper Series 3649, CESifo Group Munich.
  5. Julien Jacob, 2011. "Innovation and diffusion in risky industries under liability law: the case of “double-impact” innovations," Working Papers of BETA 2011-24, Bureau d'Economie Théorique et Appliquée, UDS, Strasbourg.
  6. Karp, Larry & Simon, Leo, 2012. "Participation games and international environmental agreements: a nonparametric model," CUDARE Working Paper Series 1127, University of California at Berkeley, Department of Agricultural and Resource Economics and Policy.
  7. Tim Friehe, 2013. "The Role of Investment in Environmental Lobbying Contests," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 56(3), pages 337-352, November.
  8. Alfred Endres & Bianca Rundshagen, 2013. "Incentives to Diffuse Advanced Abatement Technology Under the Formation of International Environmental Agreements," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 56(2), pages 177-210, October.

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