Are clean technology and environmental quality conflicting policy goals?
In this paper we analyze the effects of an environmental policy on the diffusion of a clean technology in an economy where firms compete on the output market. We show that the share of adopting firms is non-monotonic with the stringency of the environmental policy, and that the adoption of the clean technology may well increase the pollution level. We also compare the effects of an emission tax and tradable pollution permits on welfare, technology adoption, and pollution level. We show that, depending on the stringency of the policy, either the tax or the permits can yield a higher degree of technology adoption and pollution. Actually, technology adoption and environmental quality may be conflicting in discriminating among the instruments.
|Date of creation:||08 Mar 2012|
|Date of revision:|
|Contact details of provider:|| Postal: Voie du Roman Pays 34, 1348 Louvain-la-Neuve (Belgium)|
Fax: +32 10474304
Web page: http://www.uclouvain.be/core
More information through EDIRC
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.:
- Yoram Bauman & Myunghun Lee & Karl Seeley, 2008. "Does Technological Innovation Really Reduce Marginal Abatement Costs? Some Theory, Algebraic Evidence, and Policy Implications," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 40(4), pages 507-527, August.
- Martin L. Weitzman, 1974.
"Prices vs. Quantities,"
Review of Economic Studies,
Oxford University Press, vol. 41(4), pages 477-491.
- 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.
- Kort, P.M. & Farzin, Y.H., 2000.
"Pollution abatement investment when environmental regulation is uncertain,"
Other publications TiSEM
90e78d8b-95d9-4d17-9d0f-4, Tilburg University, School of Economics and Management.
- Farzin, Y H & Kort, P M, 2000. " Pollution Abatement Investment When Environmental Regulation Is Uncertain," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(2), pages 183-212.
- Weber, T.A. & Neuhoff, K., 2009.
"Carbon Markets and Technological Innovation,"
Cambridge Working Papers in Economics
0932, Faculty of Economics, University of Cambridge.
- Bréchet, Thierry & Jouvet, Pierre-André, 2008.
"Environmental innovation and the cost of pollution abatement revisited,"
Elsevier, vol. 65(2), pages 262-265, April.
- BRECHET, Thierry & JOUVET, Pierre-André, . "Environmental innovation and the cost of pollution abatement revisited," CORE Discussion Papers RP 2020, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- 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.
- Perino, Grischa & Requate, Till, 2012.
"Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted U-shaped,"
Journal of Environmental Economics and Management,
Elsevier, vol. 64(3), pages 456-467.
- Perino, Grischa & Requate, Till, 2012. "Does more stringent environmental regulation induce or reduce technology adoption? When the rate of technology adoption is inverted u-shaped," Economics Working Papers 2012-05, Christian-Albrechts-University of Kiel, Department of Economics.
- Rabah Amir & Marc Germain & Vincent Van Steenberghe, 2008. "On the Impact of Innovation on the Marginal Abatement Cost Curve," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 10(6), pages 985-1010, December.
- Baker, Erin & Adu-Bonnah, Kwame, 2008. "Investment in risky R&D programs in the face of climate uncertainty," Energy Economics, Elsevier, vol. 30(2), pages 465-486, March.
- Baker, Erin & Clarke, Leon & Shittu, Ekundayo, 2008. "Technical change and the marginal cost of abatement," Energy Economics, Elsevier, vol. 30(6), pages 2799-2816, November.
- María-Eugenia Sanin & Skerdilajda Zanaj, 2011. "A Note on Clean Technology Adoption and its Influence on Tradeable Emission Permits Prices," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 48(4), pages 561-567, April.
- Maria J. Gil-Molto & Bouwe Dijkstra, 2011. "Strictness of Environmental Policy and Investment in Abatement," Discussion Papers in Economics 11/35, Department of Economics, University of Leicester.
- Sanin, Maria-Eugenia & Zanaj, Skerdilajda, 2012. "Clean Technology Adoption Under Cournot Competition," Strategic Behavior and the Environment, now publishers, vol. 2(2), pages 159-172, July.
- 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.
When requesting a correction, please mention this item's handle: RePEc:cor:louvco:2012006. 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: (Alain GILLIS)
If references are entirely missing, you can add them using this form.