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Environmental innovation policy and international competition

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Author Info

  • Carlo Carraro
  • Domenico Siniscalco

Abstract

We consider one polluting industry in an open economy. The national government implements a policy of industrial pollution control, by inducing appropriate technological innovation to reduce toxic emissions. The emission-reducing innovations are developed through firm-specific costly investments. Under different hypotheses on market structure (perfect competition, Bertrand and Cournot oligopoly), international competition forces the national government to subsidize innovation. The appropriate subsidy scheme varies according to the information available to the government and according to market structure. If information is asymmetric, the subsidy must include the information premium necessary to separate different types of firms. Copyright Kluwer Academic Publishers 1992

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File URL: http://hdl.handle.net/10.1007/BF00338242
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Bibliographic Info

Article provided by European Association of Environmental and Resource Economists in its journal Environmental & Resource Economics.

Volume (Year): 2 (1992)
Issue (Month): 2 (March)
Pages: 183-200

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Handle: RePEc:kap:enreec:v:2:y:1992:i:2:p:183-200

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Web page: http://www.springerlink.com/link.asp?id=100263

Related research

Keywords: Pollution control; environmental innovation; international competition; subsidies; asymmetric information; self-selection;

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References

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  1. Baron, David P., 1985. "Regulation of prices and pollution under incomplete information," Journal of Public Economics, Elsevier, vol. 28(2), pages 211-231, November.
  2. Picard, Pierre, 1987. "On the design of incentive schemes under moral hazard and adverse selection," Journal of Public Economics, Elsevier, vol. 33(3), pages 305-331, August.
  3. 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.
  4. Laffont, Jean-Jacques & Tirole, Jean, 1986. "Using Cost Observation to Regulate Firms," Journal of Political Economy, University of Chicago Press, vol. 94(3), pages 614-41, June.
  5. Jean-Jacques Laffont & Jean Tirole, 1985. "The Dynamics of Incentive Contracts," Working papers 397, Massachusetts Institute of Technology (MIT), Department of Economics.
  6. Guesnerie, Roger & Laffont, Jean-Jacques, 1984. "A complete solution to a class of principal-agent problems with an application to the control of a self-managed firm," Journal of Public Economics, Elsevier, vol. 25(3), pages 329-369, December.
  7. 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.
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Citations

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Cited by:
  1. Verhoef, Erik T. & Nijkamp, Peter, 1999. "Second-best energy policies for heterogeneous firms," Energy Economics, Elsevier, vol. 21(2), pages 111-134, April.
  2. repec:dgr:uvatin:2097077 is not listed on IDEAS
  3. Jiunn-Rong Chiou & Jin-Li Hu, 2001. "Environmental Research Joint Ventures under Emission Taxes," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 20(2), pages 129-146, October.
  4. Cesare Dosi & Michele Moretto, 1997. "Pollution Accumulation and Firm Incentives to Accelerate Technological Change Under Uncertain Private Benefits," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(3), pages 285-300, October.
  5. Olivier Cadot & Bernard Sinclair-Desgagné, 1995. "Innovation Under the Threat of Stricter Environmental Standards," CIRANO Working Papers 95s-11, CIRANO.
  6. Zaman, Rubaiya, 2012. "CO2 Emissions, Trade Openness and GDP Percapita : Bangladesh Perspective," MPRA Paper 48515, University Library of Munich, Germany.
  7. Erik Verhoef & Peter Nijkamp, 1997. "The Adoption of Energy Efficiency Enhancing Technologies," Tinbergen Institute Discussion Papers 97-077/3, Tinbergen Institute.
  8. Ziesemer,Thomas, 2000. "Reconciling Environmental Policy with Employment, International Competitiveness and Participation Requirements," Research Memorandum 022, Maastricht University, Maastricht Economic Research Institute on Innovation and Technology (MERIT).
  9. Bárcena Ruiz, Juan Carlos & Garzón San Felipe, María Begoña, 2000. "Environmental Standards, Wage Incomes and the Location of Polluting Firms," BILTOKI 2000-04, Universidad del País Vasco - Departamento de Economía Aplicada III (Econometría y Estadística).
  10. Schmid, Stefanie U., 1997. "Umweltpolitik und internationale Wettbewerbsfähigkeit," Kiel Working Papers 823, Kiel Institute for the World Economy.
  11. Xing, Yuqing & Kolstad, Charles, 1996. "Environment and Trade: A Review of Theory and Issues," MPRA Paper 27694, University Library of Munich, Germany.
  12. Yuquing Xing & Charles Kolstad, 2002. "Do Lax Environmental Regulations Attract Foreign Investment?," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(1), pages 1-22, January.
  13. Carlo Carraro, 1998. "New Economic Theories," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 11(3), pages 365-381, April.
  14. Henry van Egteren & R. Smith, 2002. "Environmental Regulations Under Simple Negligence or Strict Liability," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 21(4), pages 367-394, April.
  15. Erik Verhoef & Peter Nijkamp, 1997. "The Adoption of Energy Efficiency Enhancing Technologies," Tinbergen Institute Discussion Papers 97-077/3, Tinbergen Institute.
  16. Verhoef, Erik T. & Nijkamp, Peter, 2003. "The adoption of energy-efficiency enhancing technologies.: Market performance and policy strategies in case of heterogeneous firms," Economic Modelling, Elsevier, vol. 20(4), pages 839-871, July.
  17. R. Brau & C. Carraro, 2004. "The economic analysis of voluntary approaches to environmental protection. A survey," Working Paper CRENoS 200420, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia.

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