Timing of adoption of clean technologies, transboundary pollution and international trade
We consider a symmetric model composed of two countries and a firm in each country. Firms produce the same good by means of a polluting technology that uses fossil energy. However, these firms can adopt a clean technology that uses a renewable energy and that has a lower unit cost. Surprisingly, opening markets to international competition increases the per-unit emission-tax and decreases the per-unit production subsidy. Interestingly, the socially-optimal adoption date under a common market better internalizes transboundary pollution than that under autarky, and than the optimal adoption date of regulated firms. However, the optimal adoption date of non-regulated firms completely don't internalize transboundary pollution. In autarky (resp. a common market), regulated firms adopt earlier (resp. later) than what is socially-optimal, whereas non-regulated firms adopt later than the socially-optimal adoption date and than the optimal adoption date of regulated firms. Therefore, in autarky (resp. a common market) regulators can induce firms to adopt at the socially-optimal adoption date by giving them postpone ( resp. speed up) adoption subsidies. Opening markets to international trade, speeds up the socially-optimal adoption date and delays optimal adoption dates of regulated and non-regulated firms.
|Date of creation:||Nov 2012|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
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.:
- Ben Youssef, Slim, 2010. "Adoption of a clean technology using a renewable energy," MPRA Paper 25576, University Library of Munich, Germany.
- Johanna Reichenbach & Till Requate, 2011.
"Subsidies for Renewable Energies in the Presence of Learning Effects and Market Power,"
Kiel Working Papers
- Reichenbach, Johanna & Requate, Till, 2012. "Subsidies for renewable energies in the presence of learning effects and market power," Resource and Energy Economics, Elsevier, vol. 34(2), pages 236-254.
- Reichenbach, Johanna & Requate, Till, 2011. "Subsidies for renewable energies in the presence of learning effects and market power," Kiel Working Papers 1689, Kiel Institute for the World Economy (IfW).
- Hoppe, Heidrun C., 2000. "Second-mover advantages in the strategic adoption of new technology under uncertainty," International Journal of Industrial Organization, Elsevier, vol. 18(2), pages 315-338, February.
- Zagonari, Fabio, 1998. "International Pollution Problems: Unilateral Initiatives by Environmental Groups in One Country," Journal of Environmental Economics and Management, Elsevier, vol. 36(1), pages 46-69, July.
- Cesare Dosi & Michele Moretto, 1997. "Pollution Accumulation and Firm Incentives to Accelerate Technological Change Under Uncertain Private Benefits," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 10(3), pages 285-300, October.
- Fujiwara, Kenji, 2011.
"Losses from competition in a dynamic game model of a renewable resource oligopoly,"
Resource and Energy Economics,
Elsevier, vol. 33(1), pages 1-11, January.
- Kenji Fujiwara, 2010. "Losses from competition in a dynamic game model of a renewable resource oligopoly," Discussion Paper Series 51, School of Economics, Kwansei Gakuin University, revised Apr 2010.
- Cesare Dosi & Michele Moretto, 2010.
"Environmental Innovation, War Of Attrition And Investment Grants,"
International Game Theory Review (IGTR),
World Scientific Publishing Co. Pte. Ltd., vol. 12(01), pages 37-59.
- Cesare Dosi & Michele Moretto, 2007. "Environmental Innovation, War of Attrition and Investment Grants," "Marco Fanno" Working Papers 0045, Dipartimento di Scienze Economiche "Marco Fanno".
- Michele Moretto & Cesare Dosi, 2004. "Environmental Innovation, War of Attrition and Investment Grants," Working Papers 2004.156, Fondazione Eni Enrico Mattei.
- Cesare Dosi & Michele Moretto, "undated". "Environmental Innovation, War of Attrition and Investment Grants," Working Papers ubs0406, University of Brescia, Department of Economics.
- Michael H. Riordan, 1992.
"Regulation and Preemptive Technology Adoption,"
RAND Journal of Economics,
The RAND Corporation, vol. 23(3), pages 334-349, Autumn.
- Franz Wirl & Cees Withagen, 2000. "Complexities due to sluggish expansion of backstop technologies," Journal of Economics, Springer, vol. 72(2), pages 153-174, June.
- Carolyn Fischer & Cees Withagen & Michael Toman, 2004.
"Optimal Investment in Clean Production Capacity,"
Environmental & Resource Economics,
Springer;European Association of Environmental and Resource Economists, vol. 28(3), pages 325-345, July.
- Nasiri, Fuzhan & Zaccour, Georges, 2009. "An exploratory game-theoretic analysis of biomass electricity generation supply chain," Energy Policy, Elsevier, vol. 37(11), pages 4514-4522, November.
- Whitehead, John C. & Cherry, Todd L., 2007. "Willingness to pay for a Green Energy program: A comparison of ex-ante and ex-post hypothetical bias mitigation approaches," Resource and Energy Economics, Elsevier, vol. 29(4), pages 247-261, November.
- Hoel, Michael, 1997.
"Coordination of environmental policy for transboundary environmental problems?,"
Journal of Public Economics,
Elsevier, vol. 66(2), pages 199-224, November.
- Hoel, M., 1996. "Coordination of Environmental Policy for Transboundary Environmental Problems," Memorandum 03/1996, Oslo University, Department of Economics.
- Li, Hui & Jenkins-Smith, Hank C. & Silva, Carol L. & Berrens, Robert P. & Herron, Kerry G., 2009. "Public support for reducing US reliance on fossil fuels: Investigating household willingness-to-pay for energy research and development," Ecological Economics, Elsevier, vol. 68(3), pages 731-742, January.
- Drew Fudenberg & Jean Tirole, 1985. "Preemption and Rent Equalization in the Adoption of New Technology," Review of Economic Studies, Oxford University Press, vol. 52(3), pages 383-401.
- Cremer, Helmuth & Gahvari, Firouz, 2004. "Environmental taxation, tax competition, and harmonization," Journal of Urban Economics, Elsevier, vol. 55(1), pages 21-45, January.
- Prajit K. Dutta & Saul Lach & Aldo Rustichini, 1993.
"Better Late Than Early: Vertical Differentiation in the Adoption of a New Technology,"
NBER Working Papers
4473, National Bureau of Economic Research, Inc.
- Dutta, Prajit K & Lach, Saul & Rustichini, Aldo, 1995. "Better Late Than Early: Vertical Differentiation in the Adoption of a New Technology," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 4(4), pages 563-589, Winter.
- Ben Youssef, Slim, 2009. "Transboundary Pollution and Absorptive Capacity," MPRA Paper 17158, University Library of Munich, Germany.
- Isabelle PÈchoux & JÈrôme Pouyet, 2003. "Regulated Firms with Transboundary Pollution: Does International Competition Improve Efficiency?," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 5(3), pages 499-525, 07.
- Mansouri, Faysal & Ben Youssef, Slim, 2000. " Regulation and Coordination of International Environmental Externalities with Incomplete Information and Costly Public Funds," Journal of Public Economic Theory, Association for Public Economic Theory, vol. 2(3), pages 365-388.
- Slim Ben Youssef, 2009. "Transboundary pollution, R&D spillovers and international trade," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 43(1), pages 235-250, March.
- Reinganum, Jennifer F., "undated".
"On the Diffusion of New Technology: A Game Theoretic Approach,"
312, California Institute of Technology, Division of the Humanities and Social Sciences.
- Jennifer F. Reinganum, 1981. "On the Diffusion of New Technology: A Game Theoretic Approach," Review of Economic Studies, Oxford University Press, vol. 48(3), pages 395-405.
- CHANDER, Parkash & TULKENS, Henry, "undated".
"Theoretical foundations of negotiations and cost sharing in transfrontier pollution problems,"
CORE Discussion Papers RP
983, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
- Chander, Parkash & Tulkens, Henry, 1992. "Theoretical foundations of negotiations and cost sharing in transfrontier pollution problems," European Economic Review, Elsevier, vol. 36(2-3), pages 388-399, April.
- Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-737, September.
- Caspary, Georg, 2009. "Gauging the future competitiveness of renewable energy in Colombia," Energy Economics, Elsevier, vol. 31(3), pages 443-449, May.
- Pillai, Indu R. & Banerjee, Rangan, 2009. "Renewable energy in India: Status and potential," Energy, Elsevier, vol. 34(8), pages 970-980.
- Chrysovalantou Milliou & Emmanuel Petrakis, 2009.
"Timing of Technology Adoption and Product Market Competition,"
CESifo Working Paper Series
2686, CESifo Group Munich.
- Milliou, Chrysovalantou & Petrakis, Emmanuel, 2011. "Timing of technology adoption and product market competition," International Journal of Industrial Organization, Elsevier, vol. 29(5), pages 513-523, September.
- van Soest, Daan P., 2005. "The impact of environmental policy instruments on the timing of adoption of energy-saving technologies," Resource and Energy Economics, Elsevier, vol. 27(3), pages 235-247, October.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:42467. 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: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.