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Regulatory ‘balancing’ and the efficiency of green R&D

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  • Anthony Heyes
  • Catherine Liston-Heyes

Abstract

We identify and analyse several dynamic implications of setting environmental standards such as to ‘balance’ marginal costs and benefits. The adoption of such a regulatory approach is shown to effect (i) the speed of improvement of abatement technologies; (ii) the ‘direction’ (in a sense to be defined) of that improvement; (iii) its source and the distribution of the rents from it; and (iv) the rate of development of defensive (averting) technologies. Existing views are thoroughly synthesised in the context of a simple diagrammatic model, several new results are derived and at least one conventional wisdom questioned. The message of the analysis for legislators and regulators is that cost-benefit balancing should be done with care. Copyright Kluwer Academic Publishers 1997

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  • Anthony Heyes & Catherine Liston-Heyes, 1997. "Regulatory ‘balancing’ and the efficiency of green R&D," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 9(4), pages 493-507, June.
    • Handle: RePEc:kap:enreec:v:9:y:1997:i:4:p:493-507
    DOI: 10.1007/BF02441763
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