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Are clean technology and environmental quality conflicting policy goals?

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  • Thierry Brechet
  • Guy Meunier

Abstract

In this paper we analyze the effects of an environmental policy on the diffusion of a clean technology in an economy where firms compete on the output market. We show that the share of adopting firms is non-monotonic with the stringency of the environmental policy, and that the adoption of the clean technology may well increase the pollution level. We also compare the effects of an emission tax and tradable pollution permits on welfare, technology adoption, and pollution level. We show that, depending on the stringency of the policy, either the tax or the permits can yield a higher degree of technology adoption and pollution. Actually, technology adoption and environmental quality may be conflicting in discriminating among the instruments.

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Bibliographic Info

Paper provided by European University at St. Petersburg, Department of Economics in its series CEEES Paper Series with number CE3S-01/12.

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Length: 32 pages
Date of creation: 06 Feb 2012
Date of revision:
Handle: RePEc:eus:ce3swp:0112

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Keywords: innovation; technology adoption; environmental regulation;

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Cited by:
  1. Thierry Bréchet & Sylvette Ly, 2013. "The many traps of green technology promotion," Environmental Economics and Policy Studies, Society for Environmental Economics and Policy Studies - SEEPS, Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(1), pages 73-91, January.
  2. 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.
  3. Idrissa Sibailly, 2013. "On licensing and diffusion of clean technologies in oligopoly," Working Papers, HAL hal-00911453, HAL.
  4. Bouwe Dijkstra & Maria J. Gil-Moltó, 2014. "Is Emission Intensity or Output U-shaped in the Strictness of Environmental Policy," CESifo Working Paper Series, CESifo Group Munich 4833, CESifo Group Munich.

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