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Pollution Control Innovations and the Clean Air Act of 1990

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  • David Popp
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    Abstract

    Although economists cite potential gains from induced innovation as an advantage of using market-based mechanisms to protect the environment, counts of patents related to flue gas desulfurization units ('scrubbers') peaked before trading of sulfur dioxide (SO2) permits began. This paper uses plant level data to study the effect of these patents on pollution control. I find that requiring plants constructed before 1990 to install scrubbers created incentives for innovation that would lower the costs of operating scrubbers. There is little evidence that the new patents created before 1990 improved the ability of scrubbers to more effectively control pollution. However, patents granted during the 1990s, when market-based mechanisms were in place, do serve to improve the removal efficiency of scrubbers.

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    Bibliographic Info

    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8593.

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    Date of creation: Nov 2001
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    Publication status: published as Popp, David. "Pollution Control Innovations And The Clean Air Act Of 1990," Journal of Policy Analysis and Management, 2003, v22(4,Autumn), 641-660.
    Handle: RePEc:nbr:nberwo:8593

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    1. David Popp, 2001. "Induced Innovation and Energy Prices," NBER Working Papers 8284, National Bureau of Economic Research, Inc.
    2. Bellas, Allen S., 1998. "Empirical evidence of advances in scrubber technology," Resource and Energy Economics, Elsevier, Elsevier, vol. 20(4), pages 327-343, December.
    3. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    4. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," NBER Working Papers 6437, National Bureau of Economic Research, Inc.
    5. 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.
    6. Burtraw, Dallas & Palmer, Karen & Cropper, Maureen & Carlson, Curtis, 1998. "Sulfur-Dioxide Control By Electric Utilities: What Are the Gains from Trade?," Discussion Papers, Resources For the Future dp-98-44-rev, Resources For the Future.
    7. repec:fth:harver:1473 is not listed on IDEAS
    8. Milliman, Scott R. & Prince, Raymond, 1992. "Firm incentives to promote technological change in pollution control: Reply," Journal of Environmental Economics and Management, Elsevier, vol. 22(3), pages 292-296, May.
    9. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, Elsevier, vol. 25(4), pages 549-571, June.
    10. Griliches, Zvi, 1990. "Patent Statistics as Economic Indicators: A Survey," Journal of Economic Literature, American Economic Association, American Economic Association, vol. 28(4), pages 1661-1707, December.
    11. Magat, Wesley A., 1978. "Pollution control and technological advance: A dynamic model of the firm," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 1-25, March.
    12. Joskow, Paul L & Schmalensee, Richard & Bailey, Elizabeth M, 1998. "The Market for Sulfur Dioxide Emissions," American Economic Review, American Economic Association, American Economic Association, vol. 88(4), pages 669-85, September.
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    Cited by:
    1. Elaine Frey, 2008. "Technology Diffusion and Environmental Regulation: The Adoption of Scrubbers by Coal-Fired Power Plants," NCEE Working Paper Series, National Center for Environmental Economics, U.S. Environmental Protection Agency 200804, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Mar 2008.

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