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Pollution Control Innovations and the Clean Air Act of 1990


  • David Popp


Although economists cite potential gains from induced innovation as an advantage of using market-based mechanisms to protect the environment, counts of patents related to flue gas desulfurization units ('scrubbers') peaked before trading of sulfur dioxide (SO2) permits began. This paper uses plant level data to study the effect of these patents on pollution control. I find that requiring plants constructed before 1990 to install scrubbers created incentives for innovation that would lower the costs of operating scrubbers. There is little evidence that the new patents created before 1990 improved the ability of scrubbers to more effectively control pollution. However, patents granted during the 1990s, when market-based mechanisms were in place, do serve to improve the removal efficiency of scrubbers.

Suggested Citation

  • David Popp, 2001. "Pollution Control Innovations and the Clean Air Act of 1990," NBER Working Papers 8593, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:8593
    Note: PE EEE

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    References listed on IDEAS

    1. Milliman, Scott R. & Prince, Raymond, 1992. "Firm incentives to promote technological change in pollution control: Reply," Journal of Environmental Economics and Management, Elsevier, vol. 22(3), pages 292-296, May.
    2. Bellas, Allen S., 1998. "Empirical evidence of advances in scrubber technology," Resource and Energy Economics, Elsevier, vol. 20(4), pages 327-343, December.
    3. repec:fth:harver:1473 is not listed on IDEAS
    4. Zvi Griliches, 1998. "Patent Statistics as Economic Indicators: A Survey," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 287-343 National Bureau of Economic Research, Inc.
    5. Adam B. Jaffe & Karen Palmer, 1997. "Environmental Regulation And Innovation: A Panel Data Study," The Review of Economics and Statistics, MIT Press, vol. 79(4), pages 610-619, November.
    6. Joskow, Paul L & Schmalensee, Richard & Bailey, Elizabeth M, 1998. "The Market for Sulfur Dioxide Emissions," American Economic Review, American Economic Association, vol. 88(4), pages 669-685, September.
    7. Richard G. Newell & Adam B. Jaffe & Robert N. Stavins, 1999. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," The Quarterly Journal of Economics, Oxford University Press, vol. 114(3), pages 941-975.
    8. David Popp, 2001. "Induced Innovation and Energy Prices," NBER Working Papers 8284, National Bureau of Economic Research, Inc.
    9. Curtis Carlson & Dallas Burtraw & Maureen Cropper & Karen L. Palmer, 2000. "Sulfur Dioxide Control by Electric Utilities: What Are the Gains from Trade?," Journal of Political Economy, University of Chicago Press, vol. 108(6), pages 1292-1326, December.
    10. Lanjouw, Jean Olson & Mody, Ashoka, 1996. "Innovation and the international diffusion of environmentally responsive technology," Research Policy, Elsevier, vol. 25(4), pages 549-571, June.
    11. Magat, Wesley A., 1978. "Pollution control and technological advance: A dynamic model of the firm," Journal of Environmental Economics and Management, Elsevier, vol. 5(1), pages 1-25, March.
    12. 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.
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    Cited by:

    1. Elaine F. Frey, 2013. "Technology Diffusion and Environmental Regulation: The Adoption of Scrubbers by Coal-Fired Power Plants," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    2. Elaine Frey, 2008. "Technology Diffusion and Environmental Regulation: The Adoption of Scrubbers by Coal-Fired Power Plants," NCEE Working Paper Series 200804, National Center for Environmental Economics, U.S. Environmental Protection Agency, revised Mar 2008.

    More about this item

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q00 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - General - - - General

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