Joint Management of Emission Abatement and Technological Innovation for Stock Externalities
AbstractWe investigate how emission abatement and technological innovation provide different solutions to reduce pollutant emissions. In the case of a stock externality emission abatement leads to a smooth and continuous adjustment of emissions. Conversely, technological innovation has to be interpreted as an option on a less polluted environment and can justify the use of a pollution threshold above which it is optimal to start a research and development programme for a less polluting technology. It is shown that technological innovation interferes with the traditional emission abatement approach. The optimal abatement level is logically lowered once the less polluting technology is available; nevertheless a temporary increase in emissions is optimal during the research and development period. The usual Pigouvian tax system proves to remain an efficient corrective instrument. A numerical application to the Greenhouse effect is provided. Copyright Kluwer Academic Publishers 2000
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
Bibliographic InfoArticle provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.
Volume (Year): 16 (2000)
Issue (Month): 2 (June)
Contact details of provider:
Web page: http://www.springerlink.com/link.asp?id=100263
climatic change; innovation; irreversibility; options; stock externality;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Laffont, J.J. & Tirole, J., 1995.
"Pollution Permits and Environmental Innovation,"
95.396, Toulouse - GREMAQ.
- Kolstad, Charles D., 1996. "Fundamental irreversibilities in stock externalities," Journal of Public Economics, Elsevier, vol. 60(2), pages 221-233, May.
- Cline, William R, 1991. "Scientific Basis for the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 904-19, July.
- Avinash Dixit, 1992. "Investment and Hysteresis," Journal of Economic Perspectives, American Economic Association, vol. 6(1), pages 107-132, Winter.
- Carraro, Carlo & Siniscaico, Domenico, 1994. "Environmental policy reconsidered: The role of technological innovation," European Economic Review, Elsevier, vol. 38(3-4), pages 545-554, April.
- Nordhaus, William D, 1991. "To Slow or Not to Slow: The Economics of the Greenhouse Effect," Economic Journal, Royal Economic Society, vol. 101(407), pages 920-37, July.
- Henry, Claude, 1974. "Investment Decisions Under Uncertainty: The "Irreversibility Effect."," American Economic Review, American Economic Association, vol. 64(6), pages 1006-12, December.
- Arrow, Kenneth J & Fisher, Anthony C, 1974. "Environmental Preservation, Uncertainty, and Irreversibility," The Quarterly Journal of Economics, MIT Press, vol. 88(2), pages 312-19, May.
- Pindyck, Robert S., 1990.
"Irreversibility, uncertainty, and investment,"
3137-90., Massachusetts Institute of Technology (MIT), Sloan School of Management.
- Farzin, Y. H., 1996. "Optimal pricing of environmental and natural resource use with stock externalities," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 31-57, October.
- Downing, Paul B. & White, Lawrence J., 1986. "Innovation in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 13(1), pages 18-29, March.
- Milliman, Scott R. & Prince, Raymond, 1989. "Firm incentives to promote technological change in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 247-265, November.
- Dumas, Bernard, 1991. "Super contact and related optimality conditions," Journal of Economic Dynamics and Control, Elsevier, vol. 15(4), pages 675-685, October.
- Fisher, Anthony C & Hanemann, W Michael, 1990. " Information and the Dynamics of Environmental Protection: The Concept of the Critical Period," Scandinavian Journal of Economics, Wiley Blackwell, vol. 92(3), pages 399-414.
- Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages S43-S63, November.
- Kolstad, Charles D., 1996. "Learning and Stock Effects in Environmental Regulation: The Case of Greenhouse Gas Emissions," Journal of Environmental Economics and Management, Elsevier, vol. 31(1), pages 1-18, July.
- Laffont, Jean-Jacques & Tirole, Jean, 1994. "Environmental policy, compliance and innovation," European Economic Review, Elsevier, vol. 38(3-4), pages 555-562, April.
- Falk Ita & Mendelsohn Robert, 1993. "The Economics of Controlling Stock Pollutants: An Efficient Strategy for Greenhouse Gases," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 76-88, July.
- Clarke, Harry R & Reed, William J, 1990. "Applications of Optimal Stopping in Resource Economics," The Economic Record, The Economic Society of Australia, vol. 66(194), pages 254-65, September.
- Perino, Grischa & Requate, Till, 2012.
"Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted u-shaped,"
Economics Working Papers
2012-05, Christian-Albrechts-University of Kiel, Department of Economics.
- Perino, Grischa & Requate, Till, 2012. "Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted U-shaped," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 456-467.
- Goeschl, Timo & Perino, Grischa, 2009.
"On backstops and boomerangs: Environmental R&D under technological uncertainty,"
Elsevier, vol. 31(5), pages 800-809, September.
- Timo Goeschl & Grischa Perino, 2007. "On Backstops and Boomerangs: Environmental R&D under Technological Uncertainty," Working Papers 0437, University of Heidelberg, Department of Economics, revised Jan 2007.
- Kverndokk, Snorre & Rosendahl, Knut Einar & Rutherford, Thomas F., 2004. "Climate policies and induced technological change: Impacts and timing of technology subsidies," Memorandum 05/2004, Oslo University, Department of Economics.
- Pawlina, Grzegorz & Kort, Peter M., 2005.
"Investment under uncertainty and policy change,"
Journal of Economic Dynamics and Control,
Elsevier, vol. 29(7), pages 1193-1209, July.
- Pawlina, G. & Kort, P.M., 2004. "Investment under uncertainty and policy change," Open Access publications from Tilburg University urn:nbn:nl:ui:12-148455, Tilburg University.
- Pawlina, G. & Kort, P.M., 2001. "Investment Under Uncertainty and Policy Change," Discussion Paper 2001-5, Tilburg University, Center for Economic Research.
- Goeschl, Timo & Perino, Grischa, 2007.
"Innovation without magic bullets: Stock pollution and R&D sequences,"
Journal of Environmental Economics and Management,
Elsevier, vol. 54(2), pages 146-161, September.
- Timo Goeschl & Grischa Perino, 2006. "Innovation Without Magic Bullets: Stock Pollution and R&D Sequences," Working Papers 0436, University of Heidelberg, Department of Economics, revised Dec 2006.
- Xabadia, Angels & Goetz, Renan-Ulrich & Zilberman, David, 2005. "Technology Adoption by Heterogeneous Producers to Regulate a Stock Externality," 2005 Annual meeting, July 24-27, Providence, RI 19538, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
- Baker, Erin & Shittu, Ekundayo, 2008. "Uncertainty and endogenous technical change in climate policy models," Energy Economics, Elsevier, vol. 30(6), pages 2817-2828, November.
- Kverndokk,S. & Rosendahl,K.E. & Rutherford,T.F., 2001.
"Climate policies and induced technological change : which to choose the carrot or the stick?,"
26/2001, Oslo University, Department of Economics.
- Snorre Kverndokk & Knut Rosendahl & Thomas Rutherford, 2004. "Climate Policies and Induced Technological Change: Which to Choose, the Carrot or the Stick?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 27(1), pages 21-41, January.
- Ng, Yew-Kwang, 2007. "Eternal Coase and external costs: A case for bilateral taxation and amenity rights," European Journal of Political Economy, Elsevier, vol. 23(3), pages 641-659, September.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Guenther Eichhorn) or (Christopher F. Baum).
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.