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The merits of new pollutants and how to get them when patents are granted

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  • Grischa Perino

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Abstract

The performance of market based environmental regulation is affected by patents and vice versa. This interaction is studied for a new type of innovation where new technologies reduce emissions of a specific pollutant but at the same time cause a new type of damage. A robust finding is that the efficiency of permits is affected by monopoly pricing of the patent-holding firm. This result carries over to other types of innovation. Taxes are inefficient if technologies produce perfect substitutes and share all scarce inputs. Moreover, the optimal tax on pollution might be negative.
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Suggested Citation

  • Grischa Perino, 2008. "The merits of new pollutants and how to get them when patents are granted," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(3), pages 313-327, July.
  • Handle: RePEc:kap:enreec:v:40:y:2008:i:3:p:313-327
    DOI: 10.1007/s10640-007-9155-y
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    References listed on IDEAS

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    1. Lori D. Snyder & Nolan H. Miller & Robert N. Stavins, 2003. "The Effects of Environmental Regulation on Technology Diffusion: The Case of Chlorine Manufacturing," American Economic Review, American Economic Association, vol. 93(2), pages 431-435, May.
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    Citations

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    Cited by:

    1. Sonia Schwartz & Hubert Stahn, 2014. "Competitive Permit Markets and Vertical Structures: The Relevance of Imperfectly Competitive Eco-Industries," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 16(1), pages 69-95, February.
    2. Damien Sans & Sonia Schwartz & Hubert Stahn, 2015. "On Abatement Services: Market Power and Efficient Environmental Regulation," Working Papers halshs-01182200, HAL.
    3. Grischa Perino, 2008. "The merits of new pollutants and how to get them when patents are granted," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(3), pages 313-327, July.
    4. Goeschl, Timo & Perino, Grischa, 2009. "On backstops and boomerangs: Environmental R&D under technological uncertainty," Energy Economics, Elsevier, vol. 31(5), pages 800-809, September.
    5. repec:bla:scandj:v:119:y:2017:i:3:p:709-732 is not listed on IDEAS
    6. Krysiak, Frank C., 2011. "Environmental regulation, technological diversity, and the dynamics of technological change," Journal of Economic Dynamics and Control, Elsevier, vol. 35(4), pages 528-544, April.
    7. Grischa Perino, 2010. "Technology Diffusion with Market Power in the Upstream Industry," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 46(4), pages 403-428, August.
    8. Grischa Perino, 2008. "The Design of Permit Schemes and Environmental Innovation," Working Papers 0467, University of Heidelberg, Department of Economics, revised Jun 2008.
    9. Timo Goeschl & Grischa Perino, 2017. "The Climate Policy Hold-Up: Green Technologies, Intellectual Property Rights, and the Abatement Incentives of International Agreements," Scandinavian Journal of Economics, Wiley Blackwell, vol. 119(3), pages 709-732, July.

    More about this item

    Keywords

    Innovation; Instrument choice; Monopoly pricing; New pollutants; Patents; Q55; L5; H23; O3;

    JEL classification:

    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • L5 - Industrial Organization - - Regulation and Industrial Policy
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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