The Merits of New Pollutants and How to Get Them When Patents Are Granted

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The Merits of New Pollutants and How to Get Them When Patents Are Granted

Author Info

Grischa Perino () (University of Heidelberg, Department of Economics)

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Grischa Sebastian Perino

Abstract

The performance of market based environmental regulation is affected by patents and vice versa. This interaction is studied for a new type of innovation where new technologies reduce emissions of a specific pollutant but at the same time cause a new type of damage. A robust finding is that the efficiency of permits is affected by monopoly pricing of the patent-holding firm. This result carries over to other types of innovation. Taxes are inefficient if technologies produce perfect substitutes and share all scarce inputs. Moreover, the optimal tax on pollution might be negative.

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Paper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0426.

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Length: 29 pages
Date of creation: Jul 2006
Date of revision: Jul 2006
Handle: RePEc:awi:wpaper:0426

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Article
- Grischa Perino, 2008. "The merits of new pollutants and how to get them when patents are granted," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(3), pages 313-327, July. [Downloadable!] (restricted)

Find related papers by JEL classification:
Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
L5 - Industrial Organization - - Regulation and Industrial Policy
H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
O3 - Economic Development, Technological Change, and Growth - - Technological Change

This paper has been announced in the following NEP Reports:

NEP-ALL-2007-01-14 (All new papers)
NEP-ENE-2007-01-14 (Energy Economics)
NEP-ENV-2007-01-14 (Environmental Economics)
NEP-INO-2007-01-14 (Innovation)
NEP-IPR-2007-01-14 (Intellectual Property Rights)
NEP-MIC-2007-01-14 (Microeconomics)
NEP-PBE-2007-01-14 (Public Economics)
NEP-REG-2007-01-14 (Regulation)

References listed on IDEAS
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.:

Michael Greenstone, 2003. "Estimating Regulation-Induced Substitution: The Effect of the Clean Air Act on Water and Ground Pollution," American Economic Review, American Economic Association, vol. 93(2), pages 442-448, May. [Downloadable!]
Chakravorty, Ujjayant & Roumasset, James & Tse, Kinping, 1997. "Endogenous Substitution among Energy Resources and Global Warming," Journal of Political Economy, University of Chicago Press, vol. 105(6), pages 1201-34, December.
Requate, Till & Unold, Wolfram, 2003. "Environmental policy incentives to adopt advanced abatement technology:: Will the true ranking please stand up?," European Economic Review, Elsevier, vol. 47(1), pages 125-146, February. [Downloadable!] (restricted)
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Smulders, S. & Bretschger, L., 2000. "Explaining environmental kuznets curves : how pollution induces policy and new technology," Discussion Paper 95, Tilburg University, Center for Economic Research. [Downloadable!]
Jung, Chulho & Krutilla, Kerry & Boyd, Roy, 1996. "Incentives for Advanced Pollution Abatement Technology at the Industry Level: An Evaluation of Policy Alternatives," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 95-111, January. [Downloadable!] (restricted)
Andreas Lange & Ulf Moslener, 2004. "A Bird in the Hand is Worth Two in the Bush? When Do We Prefer Something Certainly Dirty to Something Perhaps Clean?," Journal of Risk and Uncertainty, Springer, vol. 29(1), pages 35-51, 07. [Downloadable!]
Grischa Perino, 2006. "The Merits of New Pollutants and How to Get Them When Patents Are Granted," Working Papers 0426, University of Heidelberg, Department of Economics, revised Jul 2006. [Downloadable!]
Other versions:
- Grischa Perino, 2008. "The merits of new pollutants and how to get them when patents are granted," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(3), pages 313-327, July. [Downloadable!] (restricted)
R. Devlin & R. Grafton, 1994. "Tradeable permits, missing markets, and technology," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 4(2), pages 171-186, April. [Downloadable!] (restricted)
Other versions:
- Devlin, R.A. & Grafton, R.Q., 1993. "Tradeable Permits, Missing Markets, and Technology," Working Papers 9301e, University of Ottawa, Department of Economics.
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. [Downloadable!] (restricted)
Winkler, Ralph, 2005. "Structural change with joint production of consumption and environmental pollution: a neo-Austrian approach," Structural Change and Economic Dynamics, Elsevier, vol. 16(1), pages 111-135, March. [Downloadable!] (restricted)
Fischer, Carolyn & Parry, Ian W. H. & Pizer, William A., 2003. "Instrument choice for environmental protection when technological innovation is endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 523-545, May. [Downloadable!] (restricted)
Other versions:
- Parry, Ian & Pizer, William & Fischer, Carolyn, 1998. "Instrument Choice for Environmental Protection When Technological Innovation is Endogenous," Discussion Papers dp-99-04, Resources For the Future. [Downloadable!]
Laffont, Jean-Jacques & Tirole, Jean, 1996. "Pollution permits and environmental innovation," Journal of Public Economics, Elsevier, vol. 62(1-2), pages 127-140, October. [Downloadable!] (restricted)
Other versions:
- Laffont, J.J. & Tirole, J., 1995. "Pollution Permits and Environmental Innovation," Papers 95.396, Toulouse - GREMAQ.
Lori Snyder & Nolan Miller & Robert Stavins, 2003. "The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing," Working Papers 2003.48, Fondazione Eni Enrico Mattei. [Downloadable!]
Other versions:
- Stavins, Robert & Snyder, Lori & Miller, Nolan, 2003. "The Effects of Environmental Regulation On Technology Diffusion: The Case of Chlorine Manufacturing," Discussion Papers dp-03-25, Resources For the Future. [Downloadable!]
- Snyder, Lori & Miller, Nolan & Stavins, Robert, 2003. "The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing," Working Paper Series rwp03-014, Harvard University, John F. Kennedy School of Government. [Downloadable!]
- Lori D. Snyder & Nolan H. Miller & Robert N. Stavins, 2003. "The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing," American Economic Review, American Economic Association, vol. 93(2), pages 431-435, May. [Downloadable!]

Full references

Cited by:
(explanations, 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.)

Grischa Perino, 2008. "The Design of Permit Schemes and Environmental Innovation," Working Papers 0467, University of Heidelberg, Department of Economics, revised Jun 2008. [Downloadable!]
Grischa Perino, 2008. "The merits of new pollutants and how to get them when patents are granted," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 40(3), pages 313-327, July. [Downloadable!] (restricted)
Other versions:
- Grischa Perino, 2006. "The Merits of New Pollutants and How to Get Them When Patents Are Granted," Working Papers 0426, University of Heidelberg, Department of Economics, revised Jul 2006. [Downloadable!]

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