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On the Implications of Technological Innovation for Environmental Policy

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  • Parry, Ian

    () (Resources for the Future)

Abstract

This paper draws on a number of recent studies to shed light on several policy issues raised by the impact of environmental policies on technological innovation. First, to what extent does induced innovation raise the overall net benefits to society from environmental policies? Second, how does induced innovation affect the appropriate choice among alternative environmental policy instruments? Third, how does it affect the optimal stringency of environmental regulations? Fourth, should environmental policies be supplemented with additional policies to promote innovation, such as research contracts or prizes for new technologies?

Suggested Citation

  • Parry, Ian, 2001. "On the Implications of Technological Innovation for Environmental Policy," Discussion Papers dp-01-44, Resources For the Future.
  • Handle: RePEc:rff:dpaper:dp-01-44
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    References listed on IDEAS

    as
    1. Parry, Ian W H, 1998. "Pollution Regulation and the Efficiency Gains from Technological Innovation," Journal of Regulatory Economics, Springer, vol. 14(3), pages 229-254, November.
    2. Jaffe Adam B. & Stavins Robert N., 1995. "Dynamic Incentives of Environmental Regulations: The Effects of Alternative Policy Instruments on Technology Diffusion," Journal of Environmental Economics and Management, Elsevier, vol. 29(3), pages 43-63, November.
    3. Blackman, Allen & Harrington, Winston, 1998. "Using Alternative Regulatory Instruments to Control Fixed Point Air Pollution in Developing Countries: Lessons from International Experience," Discussion Papers dp-98-21, Resources For the Future.
    4. Partha Dasgupta & Joseph Stiglitz, 1980. "Uncertainty, Industrial Structure, and the Speed of R&D," Bell Journal of Economics, The RAND Corporation, vol. 11(1), pages 1-28, Spring.
    5. Parry, Ian W. H., 1995. "Optimal pollution taxes and endogenous technological progress," Resource and Energy Economics, Elsevier, vol. 17(1), pages 69-85, May.
    6. Stavins, Robert & Jaffe, Adam & Newell, Richard, 2000. "Technological Change and the Environment," Working Paper Series rwp00-002, Harvard University, John F. Kennedy School of Government.
    7. Biglaiser, Gary & Horowitz, John K, 1995. "Pollution Regulation and Incentives for Pollution-Control Research," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 3(4), pages 663-684, Winter.
    8. Nadiri, M.I., 1993. "Innovations and Technological Spillovers," Working Papers 93-31, C.V. Starr Center for Applied Economics, New York University.
    9. R. Glenn Hubbard, 1998. "Capital-Market Imperfections and Investment," Journal of Economic Literature, American Economic Association, vol. 36(1), pages 193-225, March.
    10. Fischer, Carolyn & Parry, Ian W. H. & Pizer, William A., 2003. "Instrument choice for environmental protection when technological innovation is endogenous," Journal of Environmental Economics and Management, Elsevier, vol. 45(3), pages 523-545, May.
    11. M. Ishaq Nadiri, 1993. "Innovations and Technological Spillovers," NBER Working Papers 4423, National Bureau of Economic Research, Inc.
    12. Downing, Paul B. & White, Lawrence J., 1986. "Innovation in pollution control," Journal of Environmental Economics and Management, Elsevier, vol. 13(1), pages 18-29, March.
    13. Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-918, December.
    14. 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.
    15. Goulder, Lawrence H. & Mathai, Koshy, 2000. "Optimal CO2 Abatement in the Presence of Induced Technological Change," Journal of Environmental Economics and Management, Elsevier, vol. 39(1), pages 1-38, January.
    16. Pizer, William A. & Kopp, Raymond, 2005. "Calculating the Costs of Environmental Regulation," Handbook of Environmental Economics,in: K. G. Mäler & J. R. Vincent (ed.), Handbook of Environmental Economics, edition 1, volume 3, chapter 25, pages 1307-1351 Elsevier.
    17. Zvi Griliches, 1998. "The Search for R&D Spillovers," NBER Chapters,in: R&D and Productivity: The Econometric Evidence, pages 251-268 National Bureau of Economic Research, Inc.
    18. Burtraw, Dallas & Krupnick, Alan & Austin, David & Farrell, Deirdre & Mansur, Erin, 1997. "The Costs and Benefits of Reducing Acid Rain," Discussion Papers dp-97-31-rev, Resources For the Future.
    19. Goulder, Lawrence H. & Schneider, Stephen H., 1999. "Induced technological change and the attractiveness of CO2 abatement policies," Resource and Energy Economics, Elsevier, vol. 21(3-4), pages 211-253, August.
    20. 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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    Citations

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    Cited by:

    1. Lee, Jaegul & Veloso, Francisco M. & Hounshell, David A., 2011. "Linking induced technological change, and environmental regulation: Evidence from patenting in the U.S. auto industry," Research Policy, Elsevier, vol. 40(9), pages 1240-1252.
    2. repec:gam:jsusta:v:9:y:2017:i:7:p:1240-:d:104830 is not listed on IDEAS
    3. Alfred Endres & Tim Friehe, 2013. "The monopolistic polluter under environmental liability law: incentives for abatement and R&D," Social Choice and Welfare, Springer;The Society for Social Choice and Welfare, vol. 40(3), pages 753-770, March.
    4. Alfred Endres & Tim Friehe & Bianca Rundshagen, 2015. "Environmental liability law and R&D subsidies: results on the screening of firms and the use of uniform policy," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 17(4), pages 521-541, October.
    5. von Döllen Andreas & Requate Till, 2008. "Environmental Policy and Uncertain Arrival of Future Abatement Technology," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 8(1), pages 1-20, August.
    6. Alfred Endres & Tim Friehe, 2012. "Generalized Progress of Abatement Technology: Incentives Under Environmental Liability Law," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 53(1), pages 61-71, September.
    7. Ben R. Martin, 2015. "R&D Policy Instruments: A Critical Review of What We Do & Don't Know," Working Papers wp476, Centre for Business Research, University of Cambridge.
    8. Endres, Alfred & Friehe, Tim, 2011. "R&D and abatement under environmental liability law: Comparing incentives under strict liability and negligence if compensation differs from harm," Energy Economics, Elsevier, vol. 33(3), pages 419-425, May.
    9. 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.
    10. von Döllen, Andreas & Requate, Till, 2007. "Environmental Policy and Incentives to Invest in Advanced Abatement Technology if Arrival of Future Technology is Uncertain - Extended Version," Economics Working Papers 2007-04, Christian-Albrechts-University of Kiel, Department of Economics.
    11. Timothy Swanson & Zacharias Ziegelhoefer, 2011. "Economic Frameworks for thinking about Growth, Sustainability and the role of State Intervention: Paths to Green Economies?," CIES Research Paper series 11-2012, Centre for International Environmental Studies, The Graduate Institute.
    12. Alfred Endres & Bianca Rundshagen, 2013. "Incentives to Diffuse Advanced Abatement Technology Under the Formation of International Environmental Agreements," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 56(2), pages 177-210, October.
    13. Clark, Matthew, 2005. "Corporate environmental behavior research: informing environmental policy," Structural Change and Economic Dynamics, Elsevier, vol. 16(3), pages 422-431, September.

    More about this item

    Keywords

    environment; technological innovation; pollution control; instrument choice;

    JEL classification:

    • Q28 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Renewable Resources and Conservation - - - Government Policy
    • O38 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Government Policy

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