Suchergebnisse

Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods R&D. This in turn may be used as an argument for environmental R&D getting more public support than other R&D. In this paper we systematically compare the incentives for environmental R&D with the incentives for market goods R&D. We find that the relationship might be the opposite: When the innovator is able to commit to a licence fee before environmental policy is resolved, incentives are always higher for environmental R&D than for market goods R&D. When the government sets its policy before or simultaneously with the innovator's choice of licence fee, incentives for environmental R&D may be higher or lower than for market goods R&D.

Sustainable yield from a natural resource áuctuates in response to both natural conditions and harvesting practices. On the one hand, research and development (R&D) may reduce the áuctuations through more knowledge of ecosystem functioning. On the other hand, R&D may also increase the áuctuations if it results in more e¢ cient harvesting operations with increased impact on the environment. We analyze the incentives for innovation in a natural resource based industry. The direction of technical change can either be towards proÖtability enhancing innovations or environmental hazard reducing innovations. We then pose the following research questions: Is the marketís ranking of proÖtability enhancing and environmental hazard reducing innovation projects in line with the ranking of the social planner? In order to investigate our research question, we develop a theoretical model of innovation in a natural resource based industry, which we also calibrate to the Norwegian aquaculture industry. Two key results emerge; Örst, the government should subsidize the adoption of environmental hazard reducing technology. Second, the private incentive for proÖtability enhancing innovation is likely to outperform the private incentives for environmental hazard reducing innovation. In fact, the optimal R&D subsidy to to the former type of R&D is negative, while the optimal R&D subsidy to the latter type of R&D is positive and larger the more serious the environmental hazard.

We analyze the trade and welfare effects of eco-labels in a domestic market with one domestic firm and one foreign firm. Pollution is production related, and the government can choose between including the product category in an eco-label scheme and setting an environmental standard. The environmental standard will only apply to the domestic firm, while both firms can adopt the eco-label. Given that the environmental damage is not too large, we find that it is optimal for the government to introduce an eco-label scheme. An eco-label scheme is optimal even though the domestic firm may loose profit and the foreign firm may gain. Hence, the eco-label scheme is not introduced for protectionist purposes. Further, if the government for some reason were prevented from using eco-labels, global, domestic and foreign welfare would be hampered.

Network externalities could be present for many low or zero emission technologies. One obvious example is alternative fuel cars, whose use value depends on the network of service stations. The literature has only briefy looked at environmentally benefcial technologies. Yet, the general literature on network effects is mixed on whether governments need to intervene in order to correct for network externalities. In this paper we study implications of network effects on environmental policy in a discrete time dynamic game. Firms sell a durable good. One type of durable is causing pollution when being used, while the other type is clean. Consumers' utility increase in the number of other users of the same type of durable, which gives rise to the network effect. We find that the optimal tax depends on the size of the clean network. If starting from a situation in which the dirty network dominates, the optimal tax may exceed the marginal environmental damage, thereby charging consumers for more than just their own emissions. Applying a Pigovian tax may, on the contrary, fail to introduce a socially beneficial clean network.

The purpose of the present article is to consider optimal trade policies for biofuels, taking into account the potential for carbon leakage and the complex set of policies used or discussed for biofuels. First, the authors consider the case of optimal trade policies and find that the combination of an import standard and a border carbon adjustment welfare dominates using only a border carbon adjustment (BCA). The import standard should be set such that the emissions per unit of output is as if the foreign biofuels industry were subject to the globally optimal green house gas (GHG) emission tax. Second, the authors study the same trade policies in the context of a blending mandate, which significantly alters the way the market works. Given the suboptimal implementation of a blending mandate, the optimal BCA depends on the domestic subsidy to biofuels production. High levels of subsidies may in fact imply a negative BCA; that is, the optimal policy would be to subsidize imports.

Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods R&D. This in turn may be used as an argument for environmental R&D getting more public support than other R&D. In this paper we systematically compare the incentives for environmental R&D with the incentives for market goods R&D. We find that the relationship might be the opposite: When the innovator is able to commit to a licence fee before environmental policy is resolved, incentives are always higher for environmental R&D than for market goods R&D. When the government sets its policy before or simultaneously with the innovator's choice of licence fee, incentives for environmental R&D may be higher or lower than for market goods R&D.

Since governments can influence the demand for a new abatement technology through their environmental policy, they may be able to expropriate innovations in new abatement technology ex post. This suggests that incentives for environmental R&D may be lower than the incentives for market goods R&D. This in turn may be used as an argument for environmental R&D getting more public support than other R&D. In this paper we systematically compare the incentives for environmental R&D with the incentives for market goods R&D. We find that the relationship might be the opposite: When the innovator is able to commit to a licence fee before environmental policy is resolved, incentives are always higher for environmental R&D than for market goods R&D. When the government sets its policy before or simultaneously with the innovator's choice of licence fee, incentives for environmental R&D may be higher or lower than for market goods R&D.

The theoretical justification for a greenhouse gas (GHG) cap and trade system is that participants will trade emission permits until their marginal costs of abatement equal the equilibrium price of emission permits. Abatement is then globally cost efficient. We demonstrate, however, that when the "participants" are national governments this logic may no longer apply: when a national government struggles to raise its desired first-best amount of funds for the provision of public goods, the option of emission trading generates a fiscal incentive that is, generally, inconsistent with a cost effective distribution of abatement. In market equilibrium, global cost efficiency will fail even if just a (small) subset of the participating governments are fiscally constrained: since the fiscally constrained governments will engage in too much abatement, the equilibrium price of GHG emissions will be too low, fiscally unconstrained countries will abate too little, and global GHG abatement costs will not be minimized. Finally, we argue that any institutional change which breaks the direct connection between a national government's abatement policy and its budget is likely to increase welfare.