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Environmental Research Joint Ventures under Emission Taxes

  • Jiunn-Rong Chiou

    ()

  • Jin-Li Hu

    ()

The effect of environmentalpolicy depends crucially on the strategicbehavior of firms. Firms can undertakepollution abatement innovation cooperativelythrough environmental R&D joint ventures(RJVs). Environmental RJVs have not onlyenvironmental but also economic impacts. Threetypes of environmental RJV are discussed inthis paper: R&D cartelization in which firmschoose R&D efforts to maximize the jointprofit, RJV competition in which firms sharethe R&D fruits to maximize their own profits,and RJV cartelization in which firms share R&Dfruits and maximize the joint profit. An R&Dcartelization minimizes output quantities,maximizes the total emission, and minimizes thesocial surplus. An RJV cartelization with asufficiently high spillover coefficientmaximizes R&D efforts, minimizes the totalemission, and maximizes the social surplus. Copyright Kluwer Academic Publishers 2001

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Article provided by European Association of Environmental and Resource Economists in its journal Environmental and Resource Economics.

Volume (Year): 20 (2001)
Issue (Month): 2 (October)
Pages: 129-146

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Handle: RePEc:kap:enreec:v:20:y:2001:i:2:p:129-146
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