Emission taxes and the adoption of cleaner technologies: The case of environmentally conscious consumers

Maria José Gil-Moltó and Dimitrios Varvarigos
Authors registered in the RePEc Author Service: Maria Jose Gil Molto

Resource and Energy Economics, 2013, vol. 35, issue 4, 486-504

Abstract: We model a market with environmentally conscious consumers and a duopoly in which firms consider the adoption of a clean technology. We show that as pollution increases, consumers shift more resources to the environmental activities, thereby affecting negatively the demand faced by the duopoly. This effect generates incentives for firms to adopt the clean technology even in the absence of emissions taxes. When such taxes are considered, our results indicate that the benefit of adopting the clean technology is initially increasing and then decreasing in the emission tax. The range of values for which the emission tax increases this benefit becomes narrower when the consumers’ environmental awareness is stronger.

Keywords: Environmentally conscious consumers; Technology choice; Environmental taxation (search for similar items in EconPapers)
JEL-codes: L13 Q55 Q58 (search for similar items in EconPapers)
Date: 2013
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Related works:
Working Paper: Emission Taxes and the Adoption of Cleaner Technologies: The Case of Environmentally Conscious Consumers (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:resene:v:35:y:2013:i:4:p:486-504

DOI: 10.1016/j.reseneeco.2013.04.006

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