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Environmental innovation and the cost of pollution abatement

  • BRECHET, Thierry
  • JOUVET, Pierre-André

The impact of environmental innovation on the marginal pollution abatement cost at the firm level is investigated. We show that the common assumption that innovation reduces the marginal abatement cost is wrong. We draw some implications about the incentives to innovate under environmental regulation. In particular, we find that adopting an environmental friendly tech- nology may lead to more pollution and less profit at the firm level.

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File URL: http://alfresco.uclouvain.be/alfresco/download/attach/workspace/SpacesStore/21c933a7-8af6-49c4-8b8e-bfb4c220973c/coredp_2006_40.pdf
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Paper provided by Université catholique de Louvain, Center for Operations Research and Econometrics (CORE) in its series CORE Discussion Papers with number 2006040.

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Date of creation: 00 Apr 2006
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Handle: RePEc:cor:louvco:2006040
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  1. 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.
  2. 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.
  3. McKitrick, Ross, 1999. "A Derivation of the Marginal Abatement Cost Curve," Journal of Environmental Economics and Management, Elsevier, vol. 37(3), pages 306-314, May.
  4. Karen Palmer & Wallace E. Oates & Paul R. Portney, 1995. "Tightening Environmental Standards: The Benefit-Cost or the No-Cost Paradigm?," Journal of Economic Perspectives, American Economic Association, vol. 9(4), pages 119-132, Fall.
  5. Montero, Juan-Pablo, 2002. "Permits, Standards, and Technology Innovation," Journal of Environmental Economics and Management, Elsevier, vol. 44(1), pages 23-44, July.
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