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Pollution Control Innovations and the Clean Air Act of 1990

  • David Popp
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    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.

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    File URL: http://www.nber.org/papers/w8593.pdf
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    Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 8593.

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    Date of creation: Nov 2001
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    Publication status: published as Popp, David. "Pollution Control Innovations And The Clean Air Act Of 1990," Journal of Policy Analysis and Management, 2003, v22(4,Autumn), 641-660.
    Handle: RePEc:nbr:nberwo:8593
    Note: PE EEE
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    1. Stavins, Robert & Jaffe, Adam & Newell, Richard, 1998. "The Induced Innovation Hypothesis and Energy-Saving Technological Change," Discussion Papers dp-98-12-rev, Resources For the Future.
    2. David Popp, 2001. "Induced Innovation and Energy Prices," NBER Working Papers 8284, National Bureau of Economic Research, Inc.
    3. 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.
    4. 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.
    5. Bellas, Allen S., 1998. "Empirical evidence of advances in scrubber technology," Resource and Energy Economics, Elsevier, vol. 20(4), pages 327-343, December.
    6. repec:fth:harver:1473 is not listed on IDEAS
    7. 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.
    8. 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.
    9. 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.
    10. 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 669-85, September.
    11. Zvi Griliches, 1990. "Patent Statistics as Economic Indicators: A Survey," NBER Working Papers 3301, National Bureau of Economic Research, Inc.
    12. 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.
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