Innovation Without Magic Bullets: Stock Pollution and R&D Sequences
AbstractWe study the optimal R&D trajectory in a setting where new technologies are never perfect backstops in the sense that there is no perfectly clean technology that eventually solves the pollution problem once and for all. New technologies have stings attached, i.e. each emits a specific stock pollutant. Damages are convex in individual pollution stocks but additive across stocks, creating gains from diversification. The research and pollution policies are tightly linked in such a setting. We derive the optimal pollution path and R&D program. Pollution stocks overshoot and in the long run all available technologies produce. Research is sequential and the optimal portfolio of technologies is finite.
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Bibliographic InfoPaper provided by University of Heidelberg, Department of Economics in its series Working Papers with number 0436.
Length: 39 pages
Date of creation: Dec 2006
Date of revision: Dec 2006
horizontal innovation; stock pollution; backstop technology; multistage optimal control; pollution thresholds; overshooting;
Other versions of this item:
- 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.
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
- Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
- O32 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Management of Technological Innovation and R&D
- C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-03-31 (All new papers)
- NEP-ENE-2007-03-31 (Energy Economics)
- NEP-ENV-2007-03-31 (Environmental Economics)
- NEP-INO-2007-03-31 (Innovation)
- NEP-IPR-2007-03-31 (Intellectual Property Rights)
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.:
- Marc Baudry, 2000. "Joint Management of Emission Abatement and Technological Innovation for Stock Externalities," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 16(2), pages 161-183, June.
- Krysiak, Frank C., 2011. "Environmental regulation, technological diversity, and the dynamics of technological change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 528-544, April.
- Grischa Perino, 2006.
"The Merits of New Pollutants and How to Get Them When Patents Are Granted,"
0426, University of Heidelberg, Department of Economics, revised Jul 2006.
- 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.
- Färnstrand Damsgaard, Erika, 2012. "Exhaustible resources, technology choice and industrialization of developing countries," Resource and Energy Economics, Elsevier, vol. 34(3), pages 271-294.
- Mads Greaker & Lise-Lotte Pade, 2008. "Optimal CO2 abatement and technological change. Should emission taxes start high in order to spur R&D?," Discussion Papers 548, Research Department of Statistics Norway.
- Ralph Winkler, 2008. "Optimal control of pollutants with delayed stock accumulation," CER-ETH Economics working paper series 08/91, CER-ETH - Center of Economic Research (CER-ETH) at ETH Zurich.
- Gerlagh, Reyer & Kverndokk, Snorre & Rosendahl, Knut Einar, 2014. "The optimal time path of clean energy R&D policy when patents have finite lifetime," Journal of Environmental Economics and Management, Elsevier, vol. 67(1), pages 2-19.
- Goeschl, Timo & Heyen, Daniel & Moreno-Cruz, Juan, 2013.
"The Intergenerational Transfer of Solar Radiation Management Capabilities and Atmospheric Carbon Stocks,"
0540, University of Heidelberg, Department of Economics.
- Timo Goeschl & Daniel Heyen & Juan Moreno-Cruz, 2013. "The Intergenerational Transfer of Solar Radiation Management Capabilities and Atmospheric Carbon Stocks," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 56(1), pages 85-104, September.
- Goeschl, Timo & Heyen, Daniel & Moreno-Cruz, Juan, 2013. "The Intergenerational Transfer of Solar Radiation Management Capabilities and Atmospheric Carbon Stocks," Working Papers 540, University of Heidelberg, Department of Economics.
- Rob Hart, 2009. "Bad Eggs, Learning-by-doing, and the Choice of Technology," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 42(4), pages 429-450, April.
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