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Regulatory attitudes and environmental innovation in a model combining internal and external R&D

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  • Heyes, Anthony
  • Kapur, Sandeep

Abstract

The extent to which environmental regulatory institutions are either 'green' or 'brown' impacts not just the intensity of regulation at any moment, but also the incentives for the development of new pollution-control technologies. We set up a strategic model of R&D in which a polluter can deploy technologies developed in-house, or license technologies developed by specialist outsiders (an 'eco-industry'). Polluters exert R&D effort and may even develop redundant technologies to improve the terms on which they procure technology from outside. We find that, while regulatory bias has an ambiguous impact on the best-available technology, strategic delegation to systematically biased regulators can improve social welfare.

Suggested Citation

  • Heyes, Anthony & Kapur, Sandeep, 2011. "Regulatory attitudes and environmental innovation in a model combining internal and external R&D," Journal of Environmental Economics and Management, Elsevier, vol. 61(3), pages 327-340, May.
  • Handle: RePEc:eee:jeeman:v:61:y:2011:i:3:p:327-340
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    References listed on IDEAS

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    1. repec:prp:uppmos:978-961-7023-53-4 is not listed on IDEAS
    2. Cobourn, Kelly M. & Amacher, Gregory S. & Elbakidze, Levan, 2015. "Bargaining for recharge: an analysis of cooperating and conjunctive surface water-groundwater management," 2016 Allied Social Science Association (ASSA) Annual Meeting, January 3-5, 2016, San Francisco, California 212843, Agricultural and Applied Economics Association.
    3. Chiara Franco & Giovanni Marin, 2017. "The Effect of Within-Sector, Upstream and Downstream Environmental Taxes on Innovation and Productivity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(2), pages 261-291, February.
    4. Chiara Franco & Giovanni Marin, 2013. "The Effect of Within-Sector, Upstream and Downstream Energy Taxes on Innovation and Productivity," SEEDS Working Papers 0214, SEEDS, Sustainability Environmental Economics and Dynamics Studies, revised Jan 2014.
    5. Ian MacKenzie & Markus Ohndorf, 2012. "Optimal monitoring of credit-based emissions trading under asymmetric information," Journal of Regulatory Economics, Springer, vol. 42(2), pages 180-203, October.
    6. Álvarez-Herránz, Agustín & Balsalobre, Daniel & Cantos, José María & Shahbaz, Muhammad, 2017. "Energy Innovations-GHG Emissions Nexus: Fresh Empirical Evidence from OECD Countries," Energy Policy, Elsevier, vol. 101(C), pages 90-100.
    7. Ghisetti, Claudia & Quatraro, Francesco, 2017. "Green Technologies and Environmental Productivity: A Cross-sectoral Analysis of Direct and Indirect Effects in Italian Regions," Ecological Economics, Elsevier, vol. 132(C), pages 1-13.
    8. Alvarez-Herranz, Agustin & Balsalobre-Lorente, Daniel & Shahbaz, Muhammad & Cantos, José María, 2017. "Energy innovation and renewable energy consumption in the correction of air pollution levels," Energy Policy, Elsevier, vol. 105(C), pages 386-397.
    9. Antonello Zanfei & Giovanni Marin, 2018. "Does Host Market Regulation Induce Cross Border Environmental Innovation?," Working Papers 1803, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2018.
    10. Alain-Désiré Nimubona & Hassan Benchekroun, 2014. "Environmental R&D in the Presence of an Eco-Industry," Working Papers 1406, University of Waterloo, Department of Economics, revised Sep 2014.
    11. Bernard, Sophie & Hotte, Louis & Winer, Stanley L., 2014. "Democracy, inequality and the environment when citizens can mitigate health consequences of pollution privately or act collectively," European Journal of Political Economy, Elsevier, vol. 34(C), pages 142-156.
    12. Lioui, Abraham & Sharma, Zenu, 2012. "Environmental corporate social responsibility and financial performance: Disentangling direct and indirect effects," Ecological Economics, Elsevier, vol. 78(C), pages 100-111.

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