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Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted U-shaped

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  • Perino, Grischa
  • Requate, Till

Abstract

We show that for a broad class of technologies the relationship between policy stringency and the rate of technology adoption is inverted U-shaped. This happens when the marginal abatement cost (MAC) curves of conventional and new technologies intersect, which invariably occurs when emissions are proportional to output and technological progress reduces emissions per output. This outcome does not result from policy failure. On the contrary, in social optimum, the relationship between the slope of the marginal damage curve and the rate of technology adoption is also inverted U-shaped. Under more general conditions, these curves can look even more complicated (e.g., such as inverted W-shaped).

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Bibliographic Info

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

Volume (Year): 64 (2012)
Issue (Month): 3 ()
Pages: 456-467

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Handle: RePEc:eee:jeeman:v:64:y:2012:i:3:p:456-467

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

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Keywords: Induced diffusion; Environmental policy;

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Citations

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Cited by:
  1. Federico Boffa & Stefano Clò & Alessio D'Amato, 2013. "Environmental policy and incentives to adopt abatement technologies under endogenous uncertainty," Working Papers 5, Department of the Treasury, Ministry of the Economy and of Finance.
  2. Dirk Rübbelke & Stefan Vögele, 2013. "Time and tide wait for no man: pioneers and laggards in the deployment of CCS," Working Papers 2013-13, BC3.
  3. Maria José Gil-Moltó & Dimitrios Varvarigos, 2011. "Emission Taxes and the Adoption of Cleaner Technologies: The Case of Environmentally Conscious Consumers," Discussion Papers in Economics 11/49, Department of Economics, University of Leicester.
  4. Idrissa Sibailly, 2013. "On licensing and diffusion of clean technologies in oligopoly," Working Papers hal-00911453, HAL.
  5. Alain-Désiré Nimubona & Ujjayant Chakravorty & Andrew Leach, 2014. "The Search for Abatement Technologies in the Alberta Oil Sands," CESifo Working Paper Series 4781, CESifo Group Munich.
  6. Bouwe Dijkstra & Maria J. Gil-Moltó, 2014. "Is Emission Intensity or Output U-shaped in the Strictness of Environmental Policy," CESifo Working Paper Series 4833, CESifo Group Munich.

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