Adoption of a clean technology using a renewable energy
AbstractWe consider a monopolistic firm producing a good while polluting and using a fossil energy. This firm can adopt a clean technology by incurring an investment cost decreasing exponentially with the adoption date. This clean technology does not pollute and has a lower production cost because it uses a renewable energy. We determine the optimal adoption date for the firm in the cases where it is regulated at each period of time and when it is not regulated. Interestingly, the regulated firm adopts the clean technology earlier than what is socially-optimal. However, the non-regulated firm adopts later than what is socially desired. The regulator can compensate the regulated firm for the loss incurred if he wants that it delays its adoption date to the socially-optimal one. Nevertheless, the regulator may be interested in letting the firm adopts earlier to encourage the diffusion of the use of green technologies in other industries.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 25576.
Date of creation: Sep 2010
Date of revision:
regulation; clean technology; renewable energy; adoption date.;
Find related papers by JEL classification:
- H57 - Public Economics - - National Government Expenditures and Related Policies - - - Procurement
- D62 - Microeconomics - - Welfare Economics - - - Externalities
- Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
- Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
This paper has been announced in the following NEP Reports:
- NEP-ALL-2010-10-16 (All new papers)
- NEP-ENE-2010-10-16 (Energy Economics)
- NEP-ENV-2010-10-16 (Environmental Economics)
- NEP-REG-2010-10-16 (Regulation)
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.:
- van Soest, Daan P., 2005. "The impact of environmental policy instruments on the timing of adoption of energy-saving technologies," Resource and Energy Economics, Elsevier, vol. 27(3), pages 235-247, October.
- Caspary, Georg, 2009. "Gauging the future competitiveness of renewable energy in Colombia," Energy Economics, Elsevier, vol. 31(3), pages 443-449, May.
- Li, Hui & Jenkins-Smith, Hank C. & Silva, Carol L. & Berrens, Robert P. & Herron, Kerry G., 2009. "Public support for reducing US reliance on fossil fuels: Investigating household willingness-to-pay for energy research and development," Ecological Economics, Elsevier, vol. 68(3), pages 731-742, January.
- Whitehead, John C. & Cherry, Todd L., 2007. "Willingness to pay for a Green Energy program: A comparison of ex-ante and ex-post hypothetical bias mitigation approaches," Resource and Energy Economics, Elsevier, vol. 29(4), pages 247-261, November.
- 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.
- Ben Youssef, Slim, 2008.
"Adoption of a Cleaner Technology by a Monopoly Under Incomplete Information,"
9879, University Library of Munich, Germany, revised Jul 2008.
- Slim Ben Youssef, 2010. "Adoption of a cleaner technology by a monopoly under incomplete information," Economics Bulletin, AccessEcon, vol. 30(1), pages 734-743.
- Nasiri, Fuzhan & Zaccour, Georges, 2009. "An exploratory game-theoretic analysis of biomass electricity generation supply chain," Energy Policy, Elsevier, vol. 37(11), pages 4514-4522, November.
- Ben Jebli, Mehdi & Ben Youssef, Slim, 2012.
"Timing of adoption of clean technologies, transboundary pollution and international trade,"
42467, University Library of Munich, Germany.
- Ben Jebli, Mehdi & Ben Youssef, Slim, 2014. "Timing of adoption of clean technologies, transboundary pollution and international trade," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 8(19), pages 1-31.
- Ben Jebli, Mehdi & Ben Youssef, Slim, 2013. "Timing of adoption of clean technologies, transboundary pollution and international trade," Economics Discussion Papers 2013-50, Kiel Institute for the World Economy.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Ekkehart Schlicht).
If references are entirely missing, you can add them using this form.