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Are clean technology and environmental quality conflicting policy goals?

Author

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  • Thierry Brechet

    (Center for Operations Research and Econometrics CORE - UCL - Université Catholique de Louvain = Catholic University of Louvain, Louvain School of Management - UCL - Université Catholique de Louvain = Catholic University of Louvain)

  • Guy Meunier

    (ALISS - Alimentation et sciences sociales - INRA - Institut National de la Recherche Agronomique, X - École polytechnique - IP Paris - Institut Polytechnique de Paris)

Abstract

We analyze the effects of an environmental policy on the diffusion of a clean technology. Compared to previous articles we consider that the polluting firms are competitors on the output market and we analyze the effects of the policy on the share of adopting firms in the economy. We show that this share is not monotonic with the stringency of the environmental policy. We also compare the effects of an emission tax and tradable pollution permits and we show that, depending again on the stringency of the policy, either the tax or the permits yields a higher degree of technology adoption.

Suggested Citation

  • Thierry Brechet & Guy Meunier, 2014. "Are clean technology and environmental quality conflicting policy goals?," Post-Print hal-01123273, HAL.
    • Handle: RePEc:hal:journl:hal-01123273
    DOI: 10.1016/j.reseneeco.2014.06.002
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    References listed on IDEAS

    as
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    7. 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.
    8. 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.
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    Cited by:

    1. Thierry Bréchet & Sylvette Ly, 2013. "The many traps of green technology promotion," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 15(1), pages 73-91, January.
    2. Lambertini, Luca & Poyago-Theotoky, Joanna & Tampieri, Alessandro, 2017. "Cournot competition and “green” innovation: An inverted-U relationship," Energy Economics, Elsevier, vol. 68(C), pages 116-123.
    3. Yue Zhu & Ziyuan Sun & Shiyu Zhang & Xiaolin Wang, 2021. "Economic Policy Uncertainty, Environmental Regulation, and Green Innovation—An Empirical Study Based on Chinese High-Tech Enterprises," IJERPH, MDPI, vol. 18(18), pages 1-19, September.
    4. Jana Stoever & John P. Weche, 2018. "Environmental Regulation and Sustainable Competitiveness: Evaluating the Role of Firm-Level Green Investments in the Context of the Porter Hypothesis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(2), pages 429-455, June.
    5. Gil-Moltó, Maria José & Varvarigos, Dimitrios, 2013. "Emission taxes and the adoption of cleaner technologies: The case of environmentally conscious consumers," Resource and Energy Economics, Elsevier, vol. 35(4), pages 486-504.
    6. 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.
    7. Casini, Paolo & Valentini, Edilio, 2019. "Emissions Markets with Price Stabilizing Mechanisms: Possible Unpleasant Outcomes," ES: Economics for Sustainability 291801, Fondazione Eni Enrico Mattei (FEEM) > ES: Economics for Sustainability.
    8. Alfred Endres & Tim Friehe & Bianca Rundshagen, 2020. "Diffusion and adoption of advanced emission abatement technology induced by permit trading," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 22(5), pages 1313-1337, September.
    9. Haiyang Xia & Tijun Fan & Xiangyun Chang, 2019. "Emission Reduction Technology Licensing and Diffusion Under Command-and-Control Regulation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 72(2), pages 477-500, February.
    10. Bouwe R. Dijkstra & Maria J. Gil‐Moltó, 2018. "Is emission intensity or output U‐shaped in the strictness of environmental policy?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 20(2), pages 177-201, April.
    11. Idrissa Sibailly, 2013. "On licensing and diffusion of clean technologies in oligopoly," Working Papers hal-00911453, HAL.
    12. Lan, Jing & Munro, Alistair & Liu, Zhen, 2017. "Environmental regulatory stringency and the market for abatement goods and services in China," Resource and Energy Economics, Elsevier, vol. 50(C), pages 105-123.
    13. Inge M. Bijgaart & Sjak Smulders, 2018. "Does a Recession Call for Less Stringent Environmental Policy? A Partial-Equilibrium Second-Best Analysis," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 70(4), pages 807-834, August.
    14. Di Maria, Corrado & Smulders, Sjak, 2017. "A paler shade of green: Environmental policy under induced technical change," European Economic Review, Elsevier, vol. 99(C), pages 151-169.
    15. Zeng, Bingxin & Zhu, Lei & Yao, Xing, 2020. "Policy choice for end-of-pipe abatement technology adoption under technological uncertainty," Economic Modelling, Elsevier, vol. 87(C), pages 121-130.
    16. Li, Shoude & Fu, Tong, 2022. "Abatement technology innovation, worker productivity and firm profitability: A dynamic analysis," Energy Economics, Elsevier, vol. 115(C).
    17. Wenjun Sun & Naoto Jinji, 2014. "The Effects of Emission Taxes on Pollution through the Diffusion of Clean Technology:The Presence of Green Consumers," Discussion papers e-14-014, Graduate School of Economics Project Center, Kyoto University.
    18. van den Bijgaart, Inge, 2016. "Essays in environmental economics and policy," Other publications TiSEM 298bee2a-cb08-4173-9fe1-8, Tilburg University, School of Economics and Management.
    19. Mare Sarr & Joëlle Noailly, 2017. "Innovation, Diffusion, Growth and the Environment: Taking Stock and Charting New Directions," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 66(3), pages 393-407, March.

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    More about this item

    Keywords

    instruments comparison; environmental regulation; technology adoption; marginal abatement costs; incentive; innovation;
    All these keywords.

    JEL classification:

    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation
    • Q58 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Government Policy

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