Timing of adoption of clean technologies, transboundary pollution and international trade
The authors 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 which uses fossil energy. However, these firms can adopt a clean technology which uses a renewable energy having 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. It also better internalizes transboundary pollution compared with the optimal adoption dates for firms. In autarky (resp. a common market), firms adopt the clean technology earlier (resp. later) than what is socially optimal and, therefore, regulators can induce clean technology adoption at the socially optimal adoption date by giving firms postpone (resp. speed up) adoption subsidies. Opening markets to international trade, speeds up socially optimal adoption dates and delays optimal adoption dates for firms. Consequently, with market opening, speed up adoption subsidies are needed to reduce the global flow of pollution.
|Date of creation:||2013|
|Date of revision:|
|Contact details of provider:|| Postal: |
Phone: +49 431 8814-1
Fax: +49 431 8814528
Web page: http://www.economics-ejournal.org/
More information through EDIRC
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.:
- 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.
- Carolyn Fischer & Cees Withagen & Michael Toman, 2004.
"Optimal Investment in Clean Production Capacity,"
Environmental & Resource Economics,
European Association of Environmental and Resource Economists, vol. 28(3), pages 325-345, July.
- 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.
- Franz Wirl & Cees Withagen, 2000. "Complexities due to sluggish expansion of backstop technologies," Journal of Economics, Springer, vol. 72(2), pages 153-174, June.
- Cremer, Helmuth & Gahvari, Firouz, 2004. "Environmental taxation, tax competition, and harmonization," Journal of Urban Economics, Elsevier, vol. 55(1), pages 21-45, January.
- 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.
- Copeland, Brian R & Taylor, M Scott, 1995. "Trade and Transboundary Pollution," American Economic Review, American Economic Association, vol. 85(4), pages 716-37, September.
- Michele Moretto & Cesare Dosi, 2004.
"Environmental Innovation, War of Attrition and Investment Grants,"
2004.156, Fondazione Eni Enrico Mattei.
- 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, . "Environmental Innovation, War of Attrition and Investment Grants," Working Papers ubs0406, University of Brescia, Department of Economics.
- Cesare Dosi & Michele Moretto, 2007. "Environmental Innovation, War of Attrition and Investment Grants," "Marco Fanno" Working Papers 0045, Dipartimento di Scienze Economiche "Marco Fanno".
- Ben Youssef, Slim, 2009. "Transboundary Pollution and Absorptive Capacity," MPRA Paper 17158, University Library of Munich, Germany.
- 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 563-89, Winter.
- 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.
- 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 365-88.
- Michael H. Riordan, 1992.
"Regulation and Preemptive Technology Adoption,"
RAND Journal of Economics,
The RAND Corporation, vol. 23(3), pages 334-349, Autumn.
- Cesare Dosi & Michele Moretto, 1997. "Pollution Accumulation and Firm Incentives to Accelerate Technological Change Under Uncertain Private Benefits," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 10(3), pages 285-300, October.
- Johanna Reichenbach & Till Requate, 2011.
"Subsidies for Renewable Energies in the Presence of Learning Effects and Market Power,"
Kiel Working Papers
1689, Kiel Institute for the World Economy.
- 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.
- Ben Youssef, Slim, 2010. "Adoption of a clean technology using a renewable energy," MPRA Paper 25576, University Library of Munich, Germany.
- 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.
- Reinganum, Jennifer F, 1981.
"On the Diffusion of New Technology: A Game Theoretic Approach,"
Review of Economic Studies,
Wiley Blackwell, vol. 48(3), pages 395-405, July.
- Reinganum, Jennifer F., . "On the Diffusion of New Technology: A Game Theoretic Approach," Working Papers 312, California Institute of Technology, Division of the Humanities and Social Sciences.
- 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.
- CHANDER, Parkash & TULKENS, Henry, .
"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.
- Isabelle PÈchoux & JÈr�me 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.
- Slim Ben Youssef, 2003.
"Transboundary Pollution, R&D Spillovers and International Trade,"
2003.39, Fondazione Eni Enrico Mattei.
- Slim Ben Youssef, 2009. "Transboundary pollution, R&D spillovers and international trade," The Annals of Regional Science, Springer, vol. 43(1), pages 235-250, March.
- Pillai, Indu R. & Banerjee, Rangan, 2009. "Renewable energy in India: Status and potential," Energy, Elsevier, vol. 34(8), pages 970-980.
- 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.
- Hoel, M., 1996.
"Coordination of Environmental Policy for Transboundary Environmental Problems,"
03/1996, Oslo University, Department of Economics.
- Hoel, Michael, 1997. "Coordination of environmental policy for transboundary environmental problems?," Journal of Public Economics, Elsevier, vol. 66(2), pages 199-224, November.
- 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.
- 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.
- Caspary, Georg, 2009. "Gauging the future competitiveness of renewable energy in Colombia," Energy Economics, Elsevier, vol. 31(3), pages 443-449, May.
- Fudenberg, Drew & Tirole, Jean, 1985. "Preemption and Rent Equilization in the Adoption of New Technology," Review of Economic Studies, Wiley Blackwell, vol. 52(3), pages 383-401, 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.
When requesting a correction, please mention this item's handle: RePEc:zbw:ifwedp:201350. 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: (ZBW - German National Library of Economics)
If references are entirely missing, you can add them using this form.