IDEAS home Printed from https://ideas.repec.org/a/eee/resene/v36y2014i2p601-619.html
   My bibliography  Save this article

Transboundary pollution and clean technologies

Author

Listed:
  • Benchekroun, Hassan
  • Ray Chaudhuri, Amrita

Abstract

Within a non-cooperative transboundary pollution game, we investigate the impact of the adoption of a cleaner technology (i.e., a decrease in the emission to output ratio). We show that countries may respond by increasing their emissions resulting in an increase in the stock of pollution that may be detrimental to welfare. It is when the damage and/or the initial stock of pollution are relatively large and when the natural rate of decay of pollution is relatively small that this rebound effect of clean technologies is strongest. Moreover, these results are shown to arise for a significant and empirically relevant range of parameters for the case of greenhouse gas emissions. Developing clean technologies make a global agreement over the control of emissions all the more urgent.

Suggested Citation

  • Benchekroun, Hassan & Ray Chaudhuri, Amrita, 2014. "Transboundary pollution and clean technologies," Resource and Energy Economics, Elsevier, vol. 36(2), pages 601-619.
    • Handle: RePEc:eee:resene:v:36:y:2014:i:2:p:601-619
    DOI: 10.1016/j.reseneeco.2013.09.004
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0928765513000572
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.reseneeco.2013.09.004?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    2. Larry Karp & Jiangfeng Zhang, 2016. "Taxes Versus Quantities for a Stock Pollutant with Endogenous Abatement Costs and Asymmetric Information," Studies in Economic Theory, in: Graciela Chichilnisky & Armon Rezai (ed.), The Economics of the Global Environment, pages 493-533, Springer.
    3. Michael Hoel & Aart Zeeuw, 2010. "Can a Focus on Breakthrough Technologies Improve the Performance of International Environmental Agreements?," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 47(3), pages 395-406, November.
    4. Athanassoglou, Stergios & Xepapadeas, Anastasios, 2012. "Pollution control with uncertain stock dynamics: When, and how, to be precautious," Journal of Environmental Economics and Management, Elsevier, vol. 63(3), pages 304-320.
    5. Carolyn Fischer & Cees Withagen & Michael Toman, 2004. "Optimal Investment in Clean Production Capacity," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 28(3), pages 325-345, July.
    6. David Popp, 2003. "ENTICE: Endogenous Technological Change in the DICE Model of Global Warming," NBER Working Papers 9762, National Bureau of Economic Research, Inc.
    7. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    8. Hoel, Michael & Karp, Larry, 2001. "Taxes and quotas for a stock pollutant with multiplicative uncertainty," Journal of Public Economics, Elsevier, vol. 82(1), pages 91-114, October.
    9. Sorrell, Steve & Dimitropoulos, John, 2008. "The rebound effect: Microeconomic definitions, limitations and extensions," Ecological Economics, Elsevier, vol. 65(3), pages 636-649, April.
    10. Reyer Gerlagh, 2011. "Too Much Oil," CESifo Economic Studies, CESifo Group, vol. 57(1), pages 79-102, March.
    11. Frederick Ploeg & Aart Zeeuw, 1992. "International aspects of pollution control," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 2(2), pages 117-139, March.
    12. Quentin Grafton, R. & Kompas, Tom & Van Long, Ngo, 2012. "Substitution between biofuels and fossil fuels: Is there a green paradox?," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 328-341.
    13. Kenneth Gillingham & Matthew J. Kotchen & David S. Rapson & Gernot Wagner, 2013. "The rebound effect is overplayed," Nature, Nature, vol. 493(7433), pages 475-476, January.
    14. Geoffrey Heal, 2009. "Climate Economics: A Meta-Review and Some Suggestions for Future Research," Review of Environmental Economics and Policy, Association of Environmental and Resource Economists, vol. 3(1), pages 4-21, Winter.
    15. Newell, Richard G. & Pizer, William A., 2003. "Regulating stock externalities under uncertainty," Journal of Environmental Economics and Management, Elsevier, vol. 45(2, Supple), pages 416-432, March.
    16. Ngo Long & Gerhard Sorger, 2006. "Insecure property rights and growth: the role of appropriation costs, wealth effects, and heterogeneity," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 28(3), pages 513-529, August.
    17. Jorgensen, Steffen & Zaccour, Georges, 2001. "Time consistent side payments in a dynamic game of downstream pollution," Journal of Economic Dynamics and Control, Elsevier, vol. 25(12), pages 1973-1987, December.
    18. Glomsrod, Solveig & Taoyuan, Wei, 2005. "Coal cleaning: a viable strategy for reduced carbon emissions and improved environment in China?," Energy Policy, Elsevier, vol. 33(4), pages 525-542, March.
    19. Dockner, Engelbert J. & Haug, Alfred A., 1990. "Tariffs and quotas under dynamic duopolistic competition," Journal of International Economics, Elsevier, vol. 29(1-2), pages 147-159, August.
    20. Toman, Michael A. & Withagen, Cees, 2000. "Accumulative pollution, "clean technology," and policy design," Resource and Energy Economics, Elsevier, vol. 22(4), pages 367-384, October.
    21. Dockner Engelbert J. & Van Long Ngo, 1993. "International Pollution Control: Cooperative versus Noncooperative Strategies," Journal of Environmental Economics and Management, Elsevier, vol. 25(1), pages 13-29, July.
    22. A. Greening, Lorna & Greene, David L. & Difiglio, Carmen, 2000. "Energy efficiency and consumption -- the rebound effect -- a survey," Energy Policy, Elsevier, vol. 28(6-7), pages 389-401, June.
    23. Scott Barrett, 2009. "The Coming Global Climate-Technology Revolution," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 53-75, Spring.
    24. Hanley, Nick & McGregor, Peter G. & Swales, J. Kim & Turner, Karen, 2009. "Do increases in energy efficiency improve environmental quality and sustainability?," Ecological Economics, Elsevier, vol. 68(3), pages 692-709, January.
    25. Reyer Gerlagh & Snorre Kverndokk & Knut Rosendahl, 2009. "Optimal Timing of Climate Change Policy: Interaction Between Carbon Taxes and Innovation Externalities," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 43(3), pages 369-390, July.
    26. van der Ploeg, Frederick & Withagen, Cees, 2012. "Is there really a green paradox?," Journal of Environmental Economics and Management, Elsevier, vol. 64(3), pages 342-363.
    27. Prajit Dutta & Roy Radner, 2006. "Population growth and technological change in a global warming model," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 29(2), pages 251-270, October.
    28. Scott Barrett, 2006. "Climate Treaties and "Breakthrough" Technologies," American Economic Review, American Economic Association, vol. 96(2), pages 22-25, May.
    29. Allan, Grant & Hanley, Nick & McGregor, Peter & Swales, Kim & Turner, Karen, 2007. "The impact of increased efficiency in the industrial use of energy: A computable general equilibrium analysis for the United Kingdom," Energy Economics, Elsevier, vol. 29(4), pages 779-798, July.
    30. Dockner, Engelbert J, 1992. "A Dynamic Theory of Conjectural Variations," Journal of Industrial Economics, Wiley Blackwell, vol. 40(4), pages 377-395, December.
    31. List, John A. & Mason, Charles F., 2001. "Optimal Institutional Arrangements for Transboundary Pollutants in a Second-Best World: Evidence from a Differential Game with Asymmetric Players," Journal of Environmental Economics and Management, Elsevier, vol. 42(3), pages 277-296, November.
    32. Nordhaus, William D & Yang, Zili, 1996. "A Regional Dynamic General-Equilibrium Model of Alternative Climate-Change Strategies," American Economic Review, American Economic Association, vol. 86(4), pages 741-765, September.
    33. Richard S. J. Tol, 2009. "The Economic Effects of Climate Change," Journal of Economic Perspectives, American Economic Association, vol. 23(2), pages 29-51, Spring.
    34. Sinn, Hans-Werner, 2012. "The Green Paradox: A Supply-Side Approach to Global Warming," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262016680, December.
    35. Grepperud, Sverre & Rasmussen, Ingeborg, 2004. "A general equilibrium assessment of rebound effects," Energy Economics, Elsevier, vol. 26(2), pages 261-282, March.
    36. Dixit, Avinash K, 1986. "Comparative Statics for Oligopoly," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 27(1), pages 107-122, February.
    37. Philip R. Lane & Aaron Tornell, 1999. "The Voracity Effect," American Economic Review, American Economic Association, vol. 89(1), pages 22-46, March.
    38. Dockner,Engelbert J. & Jorgensen,Steffen & Long,Ngo Van & Sorger,Gerhard, 2000. "Differential Games in Economics and Management Science," Cambridge Books, Cambridge University Press, number 9780521637329.
    39. Engelbert J. Dockner & Alfred A. Haug, 1991. "The Closed-Loop Motive for Voluntary Export Restraints," Canadian Journal of Economics, Canadian Economics Association, vol. 24(3), pages 679-685, August.
    40. Jun, Byoung & Vives, Xavier, 2004. "Strategic incentives in dynamic duopoly," Journal of Economic Theory, Elsevier, vol. 116(2), pages 249-281, June.
    41. -, 2009. "The economics of climate change," Sede Subregional de la CEPAL para el Caribe (Estudios e Investigaciones) 38679, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    42. Hoel, Michael, 2011. "The Green Paradox and Greenhouse Gas Reducing Investments," International Review of Environmental and Resource Economics, now publishers, vol. 5(4), pages 353-379, September.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Corinne Langinier & Amrita Ray Chaudhuri, 2020. "Green Technology and Patents in the Presence of Green Consumers," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(1), pages 73-101.
    2. Açıkgöz, Ömer T. & Benchekroun, Hassan, 2017. "Anticipated international environmental agreements," European Economic Review, Elsevier, vol. 92(C), pages 306-336.
    3. Chenavaz, Régis Y. & Dimitrov, Stanko & Figge, Frank, 2021. "When does eco-efficiency rebound or backfire? An analytical model," European Journal of Operational Research, Elsevier, vol. 290(2), pages 687-700.
    4. Nkuiya, Bruno & Costello, Christopher, 2016. "Pollution control under a possible future shift in environmental preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 132(PB), pages 193-205.
    5. Fouad El Ouardighi & Konstantin Kogan & Giorgio Gnecco & Marcello Sanguineti, 2020. "Transboundary pollution control and environmental absorption efficiency management," Annals of Operations Research, Springer, vol. 287(2), pages 653-681, April.
    6. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    7. Li, Huiquan & Guo, Genlong, 2019. "A differential game analysis of multipollutant transboundary pollution in river basin," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 535(C).
    8. Nkuiya, Bruno & Plantinga, Andrew J., 2021. "Strategic pollution control under free trade," Resource and Energy Economics, Elsevier, vol. 64(C).
    9. Jaakkola, Niko, 2019. "Carbon taxation, OPEC and the end of oil," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 101-117.
    10. Hideo Konishi & Minoru Nakada & Akihisa Shibata, 2018. "Free Trade Agreements with Environmental Standards," Boston College Working Papers in Economics 972, Boston College Department of Economics.
    11. Natali Hritonenko & Victoria Hritonenko & Yuri Yatsenko, 2020. "Games with Adaptation and Mitigation," Games, MDPI, vol. 11(4), pages 1-16, December.
    12. Nkuiya, Bruno, 2015. "Transboundary pollution game with potential shift in damages," Journal of Environmental Economics and Management, Elsevier, vol. 72(C), pages 1-14.
    13. Kakeu, Johnson & Agbo, Maxime, 2022. "International transfer to reduce global inequality and transboundary pollution," Energy Economics, Elsevier, vol. 114(C).
    14. Marc St‐Pierre & Aaron A. Elrod, 2022. "The perverse effect of environmental regulation on emissions: The role of product‐mix changes," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 24(1), pages 197-235, February.
    15. Shuhua Chang & Suresh P. Sethi & Xinyu Wang, 2018. "Optimal Abatement and Emission Permit Trading Policies in a Dynamic Transboundary Pollution Game," Dynamic Games and Applications, Springer, vol. 8(3), pages 542-572, September.
    16. Eleni Stathopoulou, 2014. "Environmental campaigns and endogenous technology choice under international oligopoly," Discussion Papers in Economics 14/10, Division of Economics, School of Business, University of Leicester.
    17. Li, Shoude & Fu, Tong, 2022. "Abatement technology innovation, worker productivity and firm profitability: A dynamic analysis," Energy Economics, Elsevier, vol. 115(C).
    18. de Frutos, Javier & Martín-Herrán, Guiomar, 2019. "Spatial vs. non-spatial transboundary pollution control in a class of cooperative and non-cooperative dynamic games," European Journal of Operational Research, Elsevier, vol. 276(1), pages 379-394.
    19. Chang, Shuhua & Qin, Weihua & Wang, Xinyu, 2018. "Dynamic optimal strategies in transboundary pollution game under learning by doing," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 490(C), pages 139-147.
    20. Nkuiya, Bruno, 2020. "Tradeoffs between costly capacity investment and risk of regime shift," Economic Modelling, Elsevier, vol. 91(C), pages 117-127.
    21. Pietro Vozzella & Franco Ruzzenenti & Giampaolo Gabbi, 2019. "Energy and Environmental Flows: Do Most Financialised Countries within the Mediterranean Area Export Unsustainability?," Sustainability, MDPI, vol. 11(13), pages 1-15, July.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Benchekroun, H. & Ray Chaudhuri, A., 2010. "'The Voracity Effect' and Climate Change : The Impact of Clean Technologies," Discussion Paper 2010-97, Tilburg University, Center for Economic Research.
    2. Mason, Charles F. & Polasky, Stephen & Tarui, Nori, 2017. "Cooperation on climate-change mitigation," European Economic Review, Elsevier, vol. 99(C), pages 43-55.
    3. Hassan Benchekroun & Amrita Ray Chaudhuri, 2015. "Cleaner Technologies and the Stability of International Environmental Agreements," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 17(6), pages 887-915, December.
    4. Corinne Langinier & Amrita Ray Chaudhuri, 2020. "Green Technology and Patents in the Presence of Green Consumers," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 7(1), pages 73-101.
    5. Chang, Juin-Jen & Wang, Wei-Neng & Shieh, Jhy-Yuan, 2018. "Environmental rebounds/backfires: Macroeconomic implications for the promotion of environmentally-friendly products," Journal of Environmental Economics and Management, Elsevier, vol. 88(C), pages 35-68.
    6. Joseph E. Aldy & Alan J. Krupnick & Richard G. Newell & Ian W. H. Parry & William A. Pizer, 2010. "Designing Climate Mitigation Policy," Journal of Economic Literature, American Economic Association, vol. 48(4), pages 903-934, December.
    7. Ngo Van Long, 2014. "The Green Paradox in Open Economies," CESifo Working Paper Series 4639, CESifo.
    8. Açıkgöz, Ömer T. & Benchekroun, Hassan, 2017. "Anticipated international environmental agreements," European Economic Review, Elsevier, vol. 92(C), pages 306-336.
    9. Jaakkola, Niko, 2019. "Carbon taxation, OPEC and the end of oil," Journal of Environmental Economics and Management, Elsevier, vol. 94(C), pages 101-117.
    10. Javier Frutos & Víctor Gatón & Paula M. López-Pérez & Guiomar Martín-Herrán, 2022. "Investment in Cleaner Technologies in a Transboundary Pollution Dynamic Game: A Numerical Investigation," Dynamic Games and Applications, Springer, vol. 12(3), pages 813-843, September.
    11. Cansino, José M. & Román-Collado, Rocío & Merchán, José, 2019. "Do Spanish energy efficiency actions trigger JEVON’S paradox?," Energy, Elsevier, vol. 181(C), pages 760-770.
    12. Santiago J. Rubio, 2002. "On The Coincidence Of The Feedback Nash And Stackelberg Equilibria In Economic Applications Of Differential Games," Working Papers. Serie AD 2002-11, Instituto Valenciano de Investigaciones Económicas, S.A. (Ivie).
    13. Amjadi, Golnaz & Lundgren, Tommy & Persson, Lars, 2018. "The Rebound Effect in Swedish Heavy Industry," Energy Economics, Elsevier, vol. 71(C), pages 140-148.
    14. Louis-Gaëtan Giraudet & Céline Guivarch, 2016. "Global warming as an asymmetric public bad," Working Papers 2016.26, FAERE - French Association of Environmental and Resource Economists.
    15. Jafari, Mahboubeh & Stern, David I. & Bruns, Stephan B., 2022. "How large is the economy-wide rebound effect in middle income countries? Evidence from Iran," Ecological Economics, Elsevier, vol. 193(C).
    16. Tang, Bao-Jun & Wang, Xiang-Yu & Wei, Yi-Ming, 2019. "Quantities versus prices for best social welfare in carbon reduction: A literature review," Applied Energy, Elsevier, vol. 233, pages 554-564.
    17. Sondes Kahouli & Xavier Pautrel, 2020. "Residential and Industrial Energy Efficiency Improvement: A Dynamic General Equilibrium Analysis of the Rebound Effect," Working Papers 2020.28, Fondazione Eni Enrico Mattei.
    18. Luca Spinesi, 2012. "Global Warming and Endogenous Technological Change: Revisiting the Green Paradox," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 51(4), pages 545-559, April.
    19. Lu, Yingying & Liu, Yu & Zhou, Meifang, 2017. "Rebound effect of improved energy efficiency for different energy types: A general equilibrium analysis for China," Energy Economics, Elsevier, vol. 62(C), pages 248-256.
    20. Broberg, Thomas & Berg, Charlotte & Samakovlis, Eva, 2015. "The economy-wide rebound effect from improved energy efficiency in Swedish industries–A general equilibrium analysis," Energy Policy, Elsevier, vol. 83(C), pages 26-37.

    More about this item

    Keywords

    Transboundary pollution; Renewable resource; Climate change; Clean technologies; Differential games;
    All these keywords.

    JEL classification:

    • Q20 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - General
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy
    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:resene:v:36:y:2014:i:2:p:601-619. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505569 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.