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Policy for the adoption of new environmental monitoring technologies to manage stock externalities

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  • Millock, Katrin
  • Xabadia, Angels
  • Zilberman, David

Abstract

With the development of modern information technologies, relying on nanotechnologies and remote sensing, a number of systems can be envisaged that allow for monitoring of the negative externalities generated by producers, consumers or travelers—road pricing schemes or individual emission meters for automobiles are two examples. We analyze a dynamic model of stock pollution when the regulator has incomplete information on emissions generated by heterogeneous agents. Our contribution is to explicitly study a decentralized policy for adoption of monitoring equipment over time. We determine the second-best tax rates, the pattern of monitoring technology adoption, and identify conditions for the voluntary diffusion of monitoring technologies over time. Simulations show the welfare gains compared to alternative policies.

Suggested Citation

  • Millock, Katrin & Xabadia, Angels & Zilberman, David, 2012. "Policy for the adoption of new environmental monitoring technologies to manage stock externalities," Journal of Environmental Economics and Management, Elsevier, vol. 64(1), pages 102-116.
  • Handle: RePEc:eee:jeeman:v:64:y:2012:i:1:p:102-116
    DOI: 10.1016/j.jeem.2012.02.004
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    References listed on IDEAS

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    Cited by:

    1. Jessica Coria & Xiao-Bing Zhang, 2015. "State-Dependent Enforcement to Foster the Adoption of New Technologies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(2), pages 359-381, October.
    2. repec:gam:jsusta:v:9:y:2017:i:12:p:2210-:d:120980 is not listed on IDEAS
    3. Coria, Jessica & Zhang, Xiao-Bing, 2015. "The Harrington Paradox Squared," Working Papers in Economics 608, University of Gothenburg, Department of Economics.

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