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Pollution-Reducing and Resource-Saving Technological Progress

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  • Nelissen, Dagmar
  • Requate, Till

Abstract

In this paper we survey the theoretical literature on both pollution-reducing and resource-saving technological progress. The literature can be divided into two strands. One strand deals with microeconomic models which investigate incentives to adopt and to develop environmentally more friendly technologies for different policy tools and in different economic environments, such as market structure or timing and commitment structures. It turns out that, firstly, price based instruments such as emission taxes and tradable permits perform better than command and control policies, and secondly, that under competitive conditions ex ante end ex post optimal policies are equivalent. Under imperfect market conditions the policy conclusions are more subtile. The second strand of literature deals with both pollution-reducing and resource-saving technological progress within endogenous growth models. Most of these models are characterized by three market imperfections : market power for new (intermediate) products, positive R&D spillovers, and pollution. These imperfections can be mitigated by subsidies on intermediate products, subsidies on R&D effort, and a tax on emissions. Moreover, in most models there occurs a trade-off between the speed of growth and environmental quality.

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  • Nelissen, Dagmar & Requate, Till, 2004. "Pollution-Reducing and Resource-Saving Technological Progress," Economics Working Papers 2004-07, Christian-Albrechts-University of Kiel, Department of Economics.
  • Handle: RePEc:zbw:cauewp:2273
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    Cited by:

    1. Coria, Jessica, 2009. "Taxes, permits, and the diffusion of a new technology," Resource and Energy Economics, Elsevier, vol. 31(4), pages 249-271, November.
    2. Arguedas, Carmen & van Soest, Daan P., 2009. "On reducing the windfall profits in environmental subsidy programs," Journal of Environmental Economics and Management, Elsevier, vol. 58(2), pages 192-205, September.
    3. Coria, Jessica, 2009. "Environmental policy, fuel prices and the switching to natural gas in Santiago, Chile," Ecological Economics, Elsevier, vol. 68(11), pages 2877-2884, September.
    4. Daan P. van Soest & Herman R.J. Vollebergh, 2011. "Energy Investment Behaviour: Firm Heterogeneity and Subsidy Design," Chapters,in: Improving Energy Efficiency through Technology, chapter 9 Edward Elgar Publishing.

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