Technology Diffusion with Market Power in the Upstream Industry
This paper compares taxes and tradable permits when used to regulate a competitive and polluting downstream industry that can purchase an abatement technology from a monopolistic upstream industry. Second-best policies are derived for the full range of the abatement technology's emission intensities and marginal abatement costs. The second-best permit quantity can be both above or below the socially optimal emission level. Explicit consideration of the output market provides further insights on how market power distorts the allocation in the downstream industry. The ranking between permits and taxes is ambiguous in general, but taxes weakly dominate permits if full diffusion is socially optimal. In addition, it is analysed how a cap on the permit price affects the diffusion of an abatement technology.
(This abstract was borrowed from another version of this item.)
Volume (Year): 46 (2010)
Issue (Month): 4 (August)
|Contact details of provider:|| Web page: http://www.springer.com|
Postal:c/o EAERE Secretariat - Fondazione Eni Enrico Mattei - Isola di San Giorgio Maggiore 8, I-30124 Venice, Italy
Web page: http://www.eaere.org/
More information through EDIRC
|Order Information:||Web: http://www.springer.com/economics/environmental/journal/10640/PS2|
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Requate, Till, 2003. "Commitment and Timing of Environmental Policy, Adoption of New Technology and Repercussions on R&D," Economics Working Papers 2003,07, Christian-Albrechts-University of Kiel, Department of Economics.
- Maia David & Bernard Sinclair-Desgagné, 2005.
"Environmental Regulation and the Eco-Industry,"
Journal of Regulatory Economics,
Springer, vol. 28(2), pages 141-155, 09.
- Maia David & Bernard Sinclair-Desgagné, 2004. "Environmental Regulation and the Eco-industry," CIRANO Working Papers 2004s-42, CIRANO.
- Maia David & Bernard Sinclair-Desgagné, 2004. "Environmental Regulation and the Eco-Industry," Working Papers 2004/06, INRA, Economie Publique.
- Maia David & Bernard Sinclair-Desgagné, 2005. "Environmental regulation and the eco-industry," Working Papers hal-00243019, HAL.
- Bernard Sinclair-Desgagné & Maia David, 2005. "Environmental Regulationand the Eco-Industry," Working Papers 2005.56, Fondazione Eni Enrico Mattei.
- 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.
- Grischa Perino, 2006. "The Merits of New Pollutants and How to Get Them When Patents Are Granted," Working Papers 0426, University of Heidelberg, Department of Economics, revised Jul 2006.
- Maia David & Bernard Sinclair-Desgagné, 2010.
"Pollution Abatement Subsidies and the Eco-Industry,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 45(2), pages 271-282, February.
- Maia David & Bernard Sinclair-Desgagné, 2010. "Pollution abatement subsidies and the eco-industry," Post-Print hal-01172938, HAL.
- Joseph E. Aldy & William A. Pizer, 2009.
"Issues in Designing U.S. Climate Change Policy,"
The Energy Journal,
International Association for Energy Economics, vol. 0(Number 3), pages 179-210.
- Fischer, Carolyn & Parry, Ian W. H. & Pizer, William A., 2003.
"Instrument choice for environmental protection when technological innovation is endogenous,"
Journal of Environmental Economics and Management,
Elsevier, vol. 45(3), pages 523-545, May.
- Parry, Ian & Pizer, William & Fischer, Carolyn, 1998. "Instrument Choice for Environmental Protection When Technological Innovation is Endogenous," Discussion Papers dp-99-04, Resources For the Future.
- Laffont, Jean-Jacques & Tirole, Jean, 1996.
"Pollution permits and environmental innovation,"
Journal of Public Economics,
Elsevier, vol. 62(1-2), pages 127-140, October.
- Pizer, William A., 2002. "Combining price and quantity controls to mitigate global climate change," Journal of Public Economics, Elsevier, vol. 85(3), pages 409-434, September.
- Parry, Ian W. H., 1995. "Optimal pollution taxes and endogenous technological progress," Resource and Energy Economics, Elsevier, vol. 17(1), pages 69-85, May.
- Montero, Juan-Pablo, 2002. "Permits, Standards, and Technology Innovation," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 23-44, July.
- Requate, Till & Unold, Wolfram, 2003. "Environmental policy incentives to adopt advanced abatement technology:: Will the true ranking please stand up?," European Economic Review, Elsevier, vol. 47(1), pages 125-146, February.
- Greaker, Mads & Rosendahl, Knut Einar, 2008. "Environmental policy with upstream pollution abatement technology firms," Journal of Environmental Economics and Management, Elsevier, vol. 56(3), pages 246-259, November.
- Roberts, Marc J. & Spence, Michael, 1976. "Effluent charges and licenses under uncertainty," Journal of Public Economics, Elsevier, vol. 5(3-4), pages 193-208.
- Frans P. de Vries, 2007. "Market Structure and Technology Diffusion Incentives under Emission Taxes and Emission Reduction Subsidies," Journal of Institutional and Theoretical Economics (JITE), Mohr Siebeck, Tübingen, vol. 163(2), pages 256-268, June.
- Milliman, Scott R. & Prince, Raymond, 1989. "Firm incentives to promote technological change in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 17(3), pages 247-265, November.
- Jung, Chulho & Krutilla, Kerry & Boyd, Roy, 1996. "Incentives for Advanced Pollution Abatement Technology at the Industry Level: An Evaluation of Policy Alternatives," Journal of Environmental Economics and Management, Elsevier, vol. 30(1), pages 95-111, January.
- Greaker, Mads, 2006. "Spillovers in the development of new pollution abatement technology: A new look at the Porter-hypothesis," Journal of Environmental Economics and Management, Elsevier, vol. 52(1), pages 411-420, July.
When requesting a correction, please mention this item's handle: RePEc:kap:enreec:v:46:y:2010:i:4:p:403-428. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Sonal Shukla)or (Rebekah McClure)
If references are entirely missing, you can add them using this form.